AGM report, 22 March 2013
Members of the Law Society can view a video of the AGM 2013 via the member login area.
Solicitors today voted in favour of the principle of introducing separate representation for borrowers and lenders in all conveyancing transactions.
The vote at the Society's annual general meeting in Edinburgh followed a lengthy debate on the issue. Solicitors voted by 58 to 27, with three abstentions, in favour of a motion that called for a change in the Society's practice rules to prohibit the same solicitor acting for both parties. Amended rules will now be brought to the special general meeting in September for approval.
A report from the Society's Separate Representation Working Party backed the move, with one member of the group dissenting from that view.
The report, which was presented to the AGM, explained that the issue had been driven by changes in lenders' practices.
It said: "This has brought into focus the divergent interests of lender and borrower and the risk of a conflict of interest arising when the same solicitor acts for both.
"At the same time, the removal of many firms from lenders' conveyancing panels has led to a substantial increase in the volume of security transactions where different firms act for the parties."
It concluded that changing the rules on separate representation would remove the possibility of conflict of interest and clarify solicitors' responsibilities, also disrupting fraud, reducing claims on the Guarantee Fund and lowering panel compliance costs.
The report said: "Having carefully evaluated the perceived advantages and potential disadvantages of the proposed change, the working party is of the view that it should be introduced as soon as reasonably practicable."
Working party Convener Ross MacKay, who proposed the motion in favour of change, said the recommendation on separate representation had been made following discussions with solicitors and other bodies. He told the AGM that the issue was "not black and white" and there were pros and cons to making the change.
The Secretary of the Scottish Law Agents Society, Michael Sheridan, backed the move, saying: "It is not perfect but in the view of our membership it appears preferable."
Aberdeen Council member Graham Matthews, the dissenting member of the working party, opposed the motion. He argued that it could result in added costs for clients and duplication of work, causing "chaos". He said: "This is not doing our clients any favours."
Edinburgh solicitor and a former Director of Professional Practice at the Law Society, Bruce Ritchie, pointed out that the existing rules already dealt with the issue of conflict of interest. He said the change would lead to expense and delay.
Society President Austin Lafferty said: "It's clear that there are sensible and responsible views held on all sides of the argument." He added that the Society would continue to engage with the Council of Mortgage Lenders and other stakeholders.
Law Society of Scotland debate on separate representation in conveyancing from The Law Society of Scotland on Vimeo.
The AGM, which was filmed for the first time, also agreed that the Society's constitution should be amended to ensure that any president-elect or vice president-elect who ceased to be a Council member after taking office would continue as an ex-officio member.
A motion proposing a minor change to the practice rules was also approved. A further motion on the arrival of alternative business structures stressed the importance of ensuring a level playing field between new licensed providers and traditional firms.
The meeting, which was attended by more 100 solicitors and others, included the approval of previous minutes and heard statements of the accounts of the Society, the Guarantee Fund and the Scottish Solicitors' Benevolent Fund as well as reports from the Audit Committee and In-House Lawyers' Group.
After the AGM, a debate and panel discussion on the future of the profession heard that solicitors were split over whether they took an optimistic or pessimistic view of changes currently taking place within the sector.
Issues raised included the difficult economic climate, changes to legal aid, the challenges facing Diploma students, access to the profession, reforms to the marketplace and how firms are reacting to those changes.
The benefits of new technology and social media, the ability to embrace change and market the added value of using a solicitor as well as the "skills, passion and attributes" of the profession were all highlighted as key to building a successful future.
Most panel members, who represented various sectors, including high street practice, big firm, in-house and young solicitors, were optimistic about the future of the profession.
You can download the working party's final report and also a proxy list for the AGM.