2011 Q2 Conveyancing Periodical- Improving Client Knowledge

June 2011

by Denis Stevenson, Managing Director, Rowlinsons Solicitors

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Everyone's talking about mortgage fraud.  It's not surprising given the statistics that explain the scale of the problem: approximately £1.2 billion and rising. 

But fraud is only one of the many risks that face the property buyer. The list is long and includes issues such as: seller misrepresentation, boundary disputes, access ways and drainage, planning issues and legal restrictions. These are things that, as experienced conveyancing lawyers, we encounter virtually every day. Our familiarity with the subject matter is what makes our advice to clients so critical. 

In general, lawyers tend to plough through the process on the assumption that what our clients want is the benefit of our experience and expertise to help them avoid the pitfalls and complications that can arise during a conveyancing transaction; and ultimately, to deliver a successful outcome. Of course this is true but there is more to it than that.  In my view, there is also an important education job to be done. As knowledgeable professionals we owe it to our clients to help them properly understand the risks and mitigation options available to them. In part this is about putting clients in the driving seat and giving them the wherewithal to take decisions and make choices about which course of action might help them most.

Clearly, we don't expect clients to turn into amateur conveyancing solicitors. But it seems entirely appropriate that they should have sufficient insight that will enable them to make informed decisions. One thing we recognise is that no matter how competent and experienced we are as lawyers, there is always the chance that some unforeseen risk could emerge which we had no way of knowing would come to light. In these situations there are choices that clients ought to be able to make for themselves. Chief among these is whether they should consider taking out indemnity insurance to help provide themselves with additional protection.

This option has only really become available in a meaningful way within the last year or so. And I believe the emergence of effective indemnity policies designed specifically to address conveyancing risks, is a real benefit to clients. At the moment too few of our clients consider the problems they may face when they buy a new property. To counter this situation, we are increasingly taking the time to explain the full list of risks to them in some detail. Using real live situations, we try to make sure these make sense to someone who has no legal knowledge.

This approach is very much in keeping with the general focus on customer centricity. Put simply, this means greater customer knowledge, choice and personal responsibility. It is something that our clients encounter in virtually every other area of their lives; and there's no reason why it should be any different in conveyancing.  Indeed, the advent of so-called 'Tesco law', through the introduction of alternative business structures, will do much to bring the provision of legal services closer to other more customer-friendly business models.

It is particularly important that we communicate the critical point that no matter how thorough we are as solicitors, there are certain circumstances over which we have no control. In this respect, we explain to our clients about the complexities of boundary disputes; or the invariably high costs borne by victims of property fraud.

Our objective is to help clients understand both that all these risks can and do arise; and that they can take precautions to mitigate them. So we also talk to clients about the insurance options available, such as First Title's Home Owners' Protection Policy®. This sort of policy provides clients with substantial additional protection that supplements the advice we give them. One of the things we remind our clients of is that the Home Owners' Protection Policy® covers them for risks that would not be covered by our firm's PII. This is a key point for those clients who might have thought that additional insurance may not be relevant to them.

For the moment, clients are not rushing to take out this sort of policy. However, as conveyancing risks become more widely known and understood there is every reason to assume that appropriate indemnity policies will become routinely sought by clients. Already there is growing interest among those of our clients who are considering single risk insurance policies, for example to protect them from exposure to Chancel repair or where the property is not properly registered at the Land Registry. For these clients, the offer to extend their cover to include the broadest possible set of conveyancing risks is proving to be a powerful argument. We expect that this trend will continue and increase over time.   

It is clear to us that giving clients information and choices can only ever be of benefit to them. It is all about providing best advice and delivering best practice. And best practice also means good business for Rowlinsons.

Denis Stevenson is managing director at leading, specialist conveyancing practice, Rowlinsons Solicitors, a CQS accredited practice.

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