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Right side of the law

The biggest surprise about Halifax launching a fixed-fee conveyancing service is – why hasn’t it done it before?

The Halifax brand is known and trusted in the mortgage market and with two million customers it won’t be difficult to persuade them to use the service. Sensibly, Halifax is not restricting the service to its own clients but is making it available to all.

Provided Halifax gets it right in terms of the solicitors it signs up for its panel, the service should be a success – not least of all because clients can complain to Halifax if the solicitor is not getting on with the job.

If your solicitor does not do what you have asked, there is no one to take up your complaint but the Law Society. And according to Which?, consumers have no confidence in the Law Society investigating their complaints.

A 2004 Which? survey found widespread dissatisfaction at the services offered by solicitors. The government was so concerned about how the profession operates that it commissioned Sir David Clementi to review regulation of the profession.

The danger is that the less than squeaky-clean image of solicitors will rub off on Halifax to the detriment of the brand. Any solicitor can apply to be on its panel. Halifax says that size will not be a relevant criterion as long as solicitors abide by certain service standards – meeting agreed deadlines for processing documents and so on.

Given the reputation of a minority of solicitors, it is surprising that Halifax did not offer the service in-house.

Which? research showed that 63 per cent of adults would not be concerned about getting legal advice from supermarkets or banks. While 59 per cent said it does not matter where you get advice from, provided the advisers are properly trained.

Clients would be even more inclined to use a Halifax conveyancing service if it were run by the bank. Halifax said it did not offer the service in-house, “because we have so many good relationships with solicitors.” This probably means it does not want to move in on solicitors’ territory in case they stop referring clients to the bank. Centralising conveyancing and standardising the procedure would mean Halifax could do it more cheaply than the small firms of solicitors being used. The fixed fees at 299 for properties valued at less than 50,000 up to 799 for properties valued between 401,000 — 500,000, are not particularly cheap for a straightforward conveyance.

According to the Office of the Deputy Prime Minister, there are about 1.4 million housing transactions in the UK each year, and the average conveyancing cost per transaction in England and Wales is about 560. Halifax does, however, offer a “no sale — no fee” guarantee. If the sale or purchase does not go ahead, then no charge will be made for the legal work. The decision to outsource the legal process rather than doing it in-house is more surprising given that Halifax will act as the portal for monitoring the progress of the transaction and has already made that capital expenditure and factored in the ongoing costs.

For those at Halifax who do not think that solicitors’ conveyancing standards are a cause for concern, it is worth noting that more than a third of claims to professional indemnity insurers Zurich Professional related to residential conveyancing. An analysis of Zurich’s PI business reveals that most residential conveyancing claims are due to poor investigation into the title to property and failing to identify and deal with all the mortgages and other encumbrances affecting the property, as well as failures in making searches, addressing planning issues and options for co-ownership. All basic stuff but the lawyers are still getting it wrong.

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