Over the past 20 years we have witnessed a quite extraordinary amount of change in our property law and the practice of conveyancing. Whilst the essence of a conveyancing transaction is largely the same, the component parts have changed dramatically: the introduction of the home report, the Combined (now Scottish) Standard Clauses, and enhanced conveyancing case management systems, to name but a few. Add to that the effect on everyday practice of the COVID-19 pandemic, and one has the proverbial perfect storm.
A lot has been said and written over the years as to what the future of residential property conveyancing might be for solicitors in Scotland – often by referring loosely, and usually erroneously, to what is referred to as e-conveyancing. The purpose of this article is to assess where matters currently stand, and how conveyancers might best influence their own destiny and chart a course forward.
It may be argued that there is no need to change, and that conveyancing practice will continue to evolve with solicitors involved as they always have been. That is certainly an option, but it is suggested that market forces in the UK and beyond point towards a more proactive approach being required. This comment is made against the backdrop of over 40 years in the legal profession and a similar time involved in teaching conveyancing and property law at the University of Dundee.
When I commenced my apprenticeship in 1979, deeds were typed with typewriters on engrossment paper, stitched with red ribbon and folded appropriately to satisfy Registers of Scotland – I am that old. Then came the word processor and everything that followed. Throughout this period, however, solicitors have deservedly enjoyed a prominent position in residential property transactions and have usually been the source of quality advice for buyers and sellers alike. Others are moving into the space, however, and that prominence is under threat. While it is easy to “see no ships” during busy periods such as we have seen in the past 12 months, the ships are there nonetheless – and they are closer than we might think.
Setting the pace?
The pandemic made changes to working practices essential if business was to continue. In the space of a very short period of time, Registers of Scotland adopted new practices to facilitate non-physical submission of deeds for registration. Solicitors quickly became accustomed to these changes, and practice evolved. In an article published at Journal, February 2020, 33, a contemporary of mine from university, Chris Stuart, considered the role which legal tech was then playing in transactions and asked whether the current position was really of benefit to solicitors. He suggested a digital solution at a point in time when he, like us all, did not know what was literally about to come round the corner. That solution was a Scottish conveyancing system based at Registers of Scotland (“RoS”) which would lead to us having a unified, national conveyancing system, which he described as a Scottish Conveyancing Hub working for the benefit of everyone – or all “stakeholders”, if we must use that term. In his article, he also suggested other innovations which might benefit the legal profession and others involved in broader legal processes.
In the same edition of the Journal (p 35), the Keeper of the Registers responded warmly to the suggestions made in the article and gave hope that the pace of Registers’ Digital Transformation Programme was increasing. That was, of course, before lockdown had the impact which it has had on everyday working practices. Even then, however, the Keeper sounded a cautionary note when she said that RoS was pausing its project looking at digital standard securities because research with certain firms had informed RoS that it would not be viable to have a client sign a power of attorney authorising a solicitor to sign a deed on their behalf using their Law Society of Scotland QES or a re-issued RoS smartcard.
Was that conclusion really justified? Indeed, who were these firms, and were they aware that the ARTL system functioned entirely on that basis and that powers of attorney were held at RoS as evidence of the authority given? What is in any way difficult about a client granting a transaction-specific/limited purpose authorisation to their solicitor to sign on their behalf? One can only conclude that a broader investigation of this matter might have led to a different conclusion.
Since March 2020, RoS has introduced considerable changes which have benefited all involved in the conveyancing process. The Keeper hosted a “Future of Conveyancing” conference earlier this year in an attempt to form a consensus base on which further changes could be built. RoS has also continued to liaise with the Society and other stakeholder groups, as it has always done.
It is suggested however that the past 18 months have demonstrated that change often happens when we least expect it. As a result, the change process requires to be harnessed and influenced, or else it can run away with itself and conceivably end up in a completely different place than might otherwise have been anticipated. It might also take too long to deliver change when so many changes are already taking place at pace. That, I suggest, is potentially where we might end up with conveyancing if we adopt no more than a watching brief as to developments in title insurance, lender-led (or more accurately lender-influenced) conveyancing, the use of IT “bots” in examination of title, money transfer, and other innovative projects including the use of blockchain.
Why a Forum?
Solicitors remain central to most conveyancing transactions, and can continue to be so if they harness and adopt appropriate technological developments. The fact of the matter, however, is that the so-called “monopoly” which solicitors enjoy in conveyancing relates only to the drawing of the deed of transfer. Even that can come under attack, as is evidenced by what happened in Denmark a number of years ago. Once the solicitors’ monopoly in conveyancing was done away with in Denmark, many feared the worst. The opposite happened, however: Danish property lawyers found a new forum (www.danskeboligadvokater.dk/english/) through which to get their voice heard, and their role in the process has flourished.
Such a change, made in the face of potential adversity, required leadership and vision, and it is suggested that that is precisely what is needed in Scotland. There is a proposal being mooted for the creation of a Scottish Conveyancers’ Forum.
This is not just a response to technological change. There are other potential benefits of a Conveyancers’ Forum: for example, agreed protocols on issues of conveyancing practice; enhanced risk management; better representation of the sector to third parties; and, as is the case in Denmark, the Forum becoming the face of the consumer champion with enhanced standards all round in accordance with a Residential Property Charter.
Discussions have already taken place, led by Ross MacKay, a former convener of the Property Law Committee and a driving force behind the Scottish Standard Clauses, about the formation of such a body. It is anticipated that the Forum would operate in a manner similar to that in which the Conveyancing Association (conveyancingassociation.org.uk/) operates in England & Wales. Why could that not happen? Do we not share a common purpose? Preliminary discussions have led to the conclusion that there would be considerable merit in closer collaboration with property lawyers in England & Wales at this time of rapid change.
Breaking the mould
The initial reaction of many when faced with such questions is to say that conveyancing firms need to modernise and invest more in technology. While it is true that there are still a few firms that continue to post paper documents, the majority have made smart investments to optimise their case management and communication systems. More is required, however. No matter how good a firm’s customer relationship management system (CRM) is, or how smart their automations are, it is the factors beyond the control of an individual firm that stand in the way of true end-to-end e-conveyancing. It is for this reason that innovation and leadership must come from elsewhere, before firms can finally deliver true e-conveyancing.
We are a small country with a history of innovation and, most importantly, we are already embarked on a digital journey. The goal must surely be to complete that journey and, in so doing, deliver real benefits to the economy, to citizens and those involved in the home moving process.
RoS already holds all title information with which conveyancers must interact. As suggested by Chris Stuart and others, therefore, the best solution is to create a central point of convergence that is used by all parties, with clearly defined data standards. Each firm’s CRM would then “push and pull” data into an exchange using the agreed data standards, thus enabling seamless and real time data flows for all parties involved in a title transfer. RoS is best placed to lead from the front. To do so, however, requires more than listening to stakeholders. Of course, public consultations are important (indeed, essential to help build consensus), but a transformation strategy requires focused leadership drawn from a broader base. Conveyancing is about more than registration of title.
Conveyancing is a broad church, with everything from sole practitioners to large specialist firms and dedicated conveyancing units operating under panel management systems. All have something to contribute to what the future of conveyancing might be. Young solicitors should also have a voice as they are, as a general rule, much more open to doing business digitally. To that end, I believe that now is the time for a Conveyancing Task Force to be formed, chaired independently of RoS in order to bring about real and effective lasting change within a specified period of time.
That is the way in which the Scottish Government worked when the home report was introduced, and again when the concept of ScotLIS was first floated by Unifi Scotland (unifiscotland.com). The result of both, but most notably ScotLIS, was something which broke the mould as to how information on land and property in Scotland can be accessed by all. Much is still to come from ScotLIS, but an excellent start has been made and it is surely one of the building blocks on which a new digital way of working will be built.
It is suggested that the Task Force should also look at other jurisdictions where radical and effective change has been made to conveyancing law and practice. In my opinion, the best example is Australia and the leadership shown by PEXA (pexa.com.au) while working in partnership with local and state governments, the various state land registries, and lenders and conveyancing practitioners. To introduce a similar system in the UK is not as easy as some might suggest, as the UK is not a Torrens-based system. As in Australia, however, it will be necessary for there to be legislation which will underpin and give validity to a central exchange and e-conveyancing generally.
In Australia, the Government worked with industry to establish the Australian Registrars’ National Electronic Conveyancing Council (ARNECC). This led to the development of the Electronic Conveyancing National Law, which governs the e-conveyancing process for all those involved in title exchanges. Compliance with regulation and operating standards would also need to be determined. These and other matters should be considered by the Task Force in consultation with all relevant regulatory and other bodies – most notably the Law Society of Scotland, the Scottish Legal Complaints Commission and RoS, working together for the benefit of all. Once a framework has been established, private companies are then free to develop bespoke solutions for title transfers.
We are rightly proud of the fact that we in Scotland operate from principle rather than precedent. If we adopt that approach when looking to change our law and practice, we can start to make real change happen now and, in so doing, ensure that solicitors continue to help shape the practice of conveyancing for the benefit of all. Either that or we wait to see how others shape the home moving process and accept whatever crumbs are left on the table.
We should be aiming high, and doing so in a co-ordinated manner. Enormous sums are being invested elsewhere in legal tech. As a developed but, importantly, small enough country to be an ideal testing ground, it is suggested that we should put our best foot forward to secure the benefits such investment can bring to both the economy and the maintenance of our prized legal system. The result could be transformational.
Professor Steward Brymer WS, Brymer Legal Ltd
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