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The Law Society of Scotland votes to end conflict of interest exception in property sales

The Law Society of Scotland’s members have voted to end an exception to conflict of interest rules which allows for a single solicitor to act for both purchaser and lender in property transactions.

Members voted 58 to 27 at the society’s annual general meeting today in favour of compulsory separate representation for lenders and buyers in all transactions.

New practice rules will be brought forward for its members to vote on at a special general meeting in September.

Law Society president Austin Lafferty says the society became aware of situations where conflict of interest arose, under the current exception, and the protection of the borrower client interest as well as the lender did not align.

He says: “This was a highly important debate to have and I thank everyone for their contributions. We can view today’s vote as just the start of a move towards reforming and improving conveyancing practice and we intend to hold further discussions with the Council of Mortgage Lenders and others. The exception to the rules was introduced in 1986 to help ensure a smooth transaction but the world is a very different place now. The severe economic downturn, increasingly complex transactions, increasing risk of mortgage fraud and the additional pressures from lenders mean that it is no longer appropriate, and indeed is arguably not in the public interest to continue.”

However, the Council of Mortgage Lenders has condemned the proposal, saying it will lead to higher costs and runs contrary to consumer interest.

CML director general Paul Smee says: “It is disappointing that a measure which is so blatantly against consumer interests and will impose added costs and added scope for confusion and delay has been voted through, with not even the pretence of wider consultation.

“At a time when housing and mortgage markets are still recovering, this is a protectionist measure with little regard for the interests of consumers.”


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  • Mr Mortgage 22nd March 2013 at 2:59 pm

    CML needs to get real. The vast majority – one notable exception – of bridging lenders have always insisted on separate representation.
    Unless lenders want to say that the duty the lawyer holds is to the borrower first then it must always be in the best interest of the borrower to have separate representation.
    Well done the Scots for putting the customer first.