A stark warning by the Chief Legal Ombudsman about the of dangers from ‘conveyancing factories’
The Legal Ombudsman’s report – ‘Losing the Plot – residential conveyancing complaints and their causes’ published on 11th December 2012 says that in a market where conveyancing transactions are dramatically reduced, conveyancers should be doing everything they can to “preserve and enhance their reputations”; and providing a “quality service and reducing the causes of complaints should be an absolute priority for lawyers”.
However, the Report observes that consumers are also tightening their belts and turning to cheaper conveyancing services where commercially-minded businesses have muscled in to provide a commoditised, automated and competitive product displacing the traditional solicitor firm with 'conveyancing factories'.
Yet various features of such operations – such as 'fixed fee', online transactions or 'no move, no fee' agreements – come in for particular criticism with actual recorded examples of lack of continuity of legal cover when conveyancers go on holiday, “surprise costs”, the failure to keep clients informed of increased charges as the transaction moves along, and even the imposition of an insurance policy on a client to pay for the ‘no completion no fee’ deal. The legal services benchmarking report commissioned by the Legal Services Board (LSB) was quoted as identifying that roughly 12% of those surveyed who had purchased a conveyancing service said that they were quoted a fixed fee which was different from what they actually ended up paying.
Indeed, the Report observes that in fact residential conveyancing still attracts thousands of complaints a year (reportedly 17.5% of the 7,500 complaints handled by the ombudsman’s office in just the past year) making it the second most complained about area of law behind family.
Compounding the concern, the Report highlights that now that Alternative Business Structures enable estate agency groups and mortgage brokers to move into the residential conveyancing market, the Legal Ombudsman office are “bracing themselves for an increase in such automated transactions and fixed price deals”, and due to the fact that price is undoubtedly a key driver in consumer buying habits when it comes to Conveyancing, this will play into the hands of such volume businesses.
Yet whist the Legal Ombudsman recognises there are benefits to the consumer looking for a cheap deal, his concern is that some firms “may be too focused on the volume of work they're creating at the expense of providing a reasonable service” and that in fact “automated and fixed price services may also be too geared towards simple transactions. Where there are complexities – more detailed searches required for example – that need to be taken into account, such rigid business models may come unstuck. And it is then the consumer who often suffers as a result.”
However, the quoted LSB's benchmarking report also reveals that 63% of respondents said a firm's reputation was a factor influencing choice. This is in line with the Legal Ombudsman’s conclusion that “keeping to agreements over cost, ensuring delays are kept to a minimum, and maintaining good lines of communication. If lawyers stick to these simple principles I predict they won't go far wrong.”