The biggest buzz amongst conveyancing solicitors in recent times has been the consultation set up by the Law Commission which is due to finish at the end of this month. This is looking at possible improvements to the Land Registration Act 2002 and it could have an impact on conveyancers across the UK. One of the key options under consideration is whether solicitors in this field should have a statutory duty of care towards the Land Registry.
The reason for the emphasis on duty of care has been the increase in fraudulent activity. The Land Registry has paid out just under £60 million in the last ten years because of fraud. They have only been able to recover a fraction of that amount. The other major issue that the Law Commission is looking at is how e-conveyancing can develop in the future.
The fact that the Land Registry has always been underpinned by an indemnity scheme is not really in question, even though there are moves to actually privatise the organisation in the coming years. While the Registry is providing indemnity, the general feeling is that it is not in the best position to spot and deal with potential fraudulent activity before it causes harm.
The main duty of care is on the conveyancers who handle property transactions. As the legal advisors for property transactions they are the most well placed to discover fraud, but there is a lack of best practice in place within the industry. Introducing a statutory duty of care could ensure conveyancers have a tighter framework in place that could reduce the number of transactions that end in fraudulent activity.
The introduction of the 2002 act was to take into account the rise in e-conveyancing with more business being carried out online. Concerns of fraud and the lack of security that has caused some conveyancers to go back to post and paper communications, particularly when handling sensitive information, has largely stalled this potentially useful tool. The Law Commission is looking at this area in particular in their consultation though we are probably some way from having a situation where completion and registration can take place simultaneously and securely online.
The Law Commission are also aware that other countries are forging ahead with e-conveyancing and it’s something that solicitors who work in the industry are still keen on. Currently, this is no more than a consultation and the Law Commission is getting evidence from conveyancers, land owners and other interested parties, hopefully to come up with the suggestions that can make a big difference to the sector.
The consultation ends at the end of this month and then we’ll begin the long process of deciding whether legislation can indeed be improved and what this really means for conveyancers at large. A greater commitment to a duty of care could lead to major improvements to processes and protect interested parties from becoming victims of fraud. The further development of e-conveyancing after a slightly stalled start could also make transactions easier and quicker, to the benefit of all parties.