Changes to solicitors’ practices should benefit public | The Post

Despite the reduction of stamp duty to 1 per cent since last December, the cost of buying a home can still be significant, especially in recessionary times. Small wonder that reduced solicitors’ fees seem attractive.

But is cheap conveyancing such a good idea? Too good to be true, perhaps? With the property market remaining slow and the quality of solicitors’ work during the boom years coming under scrutiny, bargain deals from solicitors are being increasingly questioned.

The Minister for Justice, Alan Shatter, launching a report on the legal profession, said not all legal services were under-priced and not all low-cost conveyancing was of poor quality. But, particularly in cut-price conveyancing, corners were being cut too often by solicitors under pressure from clients and financial institutions.

The pressure to reduce fees may partly be due to the slowdown in the property market, but it may also be because of the huge numbers of new solicitors in recent years. More than 700 new solicitors a year have graduated from the Law Society’s law school in the past three years alone, most of them hoping to join an already overcrowded profession. The society itself acknowledges that there are at least 1,000 unemployed solicitors, a statistic probably unique in the history of the profession.

Meanwhile, there has reportedly been a dramatic increase in negligence claims against solicitors, both by their clients and by banks. Many of these arise from property transactions in which solicitors under pressure arguably gave insufficient time to clients’ files or delegated work to assistants.

Conveyancing above all requires attention to detail, but ill-considered, binding undertakings as to good title were freely given to banks.

There are now clear indications that the public has not been particularly well served by the cosy relationship between solicitors and banks.

With banks demanding that title undertakings be fulfilled, increasing numbers of solicitors are realising that the relationship is not so cosy after all. In addition, many solicitors are tiring of doing much of the banks’ own legal work without payment from the banks.

The future relationship of solicitors with the lending institutions may now change significantly.

Banks doing their own legal checking before lending money may benefit customers in particular. Customers and banks are both then less likely to later discover errors by underpaid and overworked solicitors.

Banks giving loan cheques to solicitors simply on undertakings to provide good title are increasingly being recognised as the shortest route really being the longest way home. Many claims now being made alleging defective work by solicitors would not have arisen if the banks had checked the titles themselves in the first place. There would then be fewer customers with defective titles on their properties - but time was short and there was money to be made.

At present, banks still do not check titles before handing over loan cheques, and simply rely on the purchasers’ solicitors.

Often, the purchasers do not really understand the serious implications of these arrangements until a problem arises.

Until now, solicitors have had no choice because of arrangements with banks arranged by the Law Society. We may be on our way back to the boring, but safer, ‘‘three-way closings’’ between the solicitors of sellers, buyers and the lending institutions. When the property market comes back to life, the landscape may be quite different. Special offers from solicitors may seem less attractive, the relationship between banks and solicitors may be a less cosy - and the public may be the real winners.

Patrick Igoe is a solicitor and principal of Patrick Igoe & Co Solicitors

via thepost.ie

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