A new system could help embattled conveyancers, lenders and intermediaries alike, argues Alan Dring, managing director of consultancy the Mad Approach
These are challenging times for the conveyancing profession. Everywhere you look there are warnings about fraud and negligence. At best, conveyancers face increased professional indemnity fees. At worst, they face declining trust from clients and business partners which can threaten their very survival as businesses.
But what if a new system could raise standards dramatically and significantly reduce the risk of fraud? We think that Jet, a new online tool, developed with myself and technology firm Space 01, and a number of conveyancing firms, has many of the answers.
But first we need to look at what is going wrong. The recent warning from Optima Legal partner David Duckworth, who said that the conveyancing sector is in danger of imploding is only the latest of many, but it is one of the starkest.
Duckworth highlighted the fact that the Solicitors’ Regulation Authority’s insurance body of last resort, the Assigned Risk Pool, is in crisis as more and more firms fall back on it and drive up costs for those who are still in business.
He mentioned a few other statistics that should concentrate minds too. For example, conveyancing negligence is the source of 50% of all solicitors’ PII claims and half of those claims – 25% – are from problems identified by lenders, a level that would strain any business relationship.
Reducing fraud and negligence is the top priority for the Law Society, the Council of Mortgage Lenders and the FSA. It should also be the main focus for any conveyancing practice that intends to be in business in two or three years’ time.
So how can we find a way to address these issues, calm those fears and get the business of conveyancing back on track? We think Jet can do more than help. It incorporates the 22,000 plus elements of the CML Lenders Handbook (in association with First Title’s HOPP) to allow a conveyancer to achieve 100% compliance with each individual lender’s criteria.
It helps lenders develop their conveyancing panel criteria while allowing conveyancers to clamp down on negligence and fraud and comply with the new regulatory regime due to comes into force next October.
Of course, the Law Society has already done some important work establishing the Conveyancing Quality Scheme, but I would argue that the jury is still out from the lenders’ perspective. The Jet proposition has been developed to significantly enhance the CQS objectives and should help reassure lenders further. They need reassurance.
Outgoing CML director general Michael Coogan says that there will be no open panel arrangements with lenders. That is understandable given the fact that fraud has reached a shocking £1 billion a year. The CML has openly criticised conveyancers’ poor professional performance. These criticisms may not apply to everyone. But we think something is needed to boost confidence on all sides. Lenders want more involvement in the process. We think Jet can provide that.
Conveyancers need to make sure they are snugly tucked up in bed with the lenders rather than risking falling out of bed to a rude awakening.
Jet is not just a compliance tool however. When you develop a proposition, in my opinion, it has to do three things, grow the bottom line, increase efficiency and bring repeat business. We think Jet does all three.
It has its foundations in addressing fraud and negligence but it is a commercial tool aimed at helping our partners increase the efficiency of their practices too.
We know that within the Conveyancing Association’s membership, some practices have developed their own internal systems aimed at achieving a not dissimilar outcome to Jet. We believe that only the very best will be as robust as the Jet system.
Finally it is clear that the big intermediary networks such as Sesame and LSL are looking seriously at conveyancing and examining how they support their members in what is still a very difficult market. We think Jet can help lenders, major conveyancers and distributors.
Most conveyancers would admit the sector is in crisis over fraud and negligence. We think Jet offers a solution that addresses these concerns, but also one that points the way to re-establishing a profitable, growing conveyancing sector.
For anyone interested in finding out more please log on to <a href="http://www.jetconvey.com">www.jetconvey.com</a>
