Law Society statement
Dear colleagues,
Last week I met with senior representatives of HSBC to discuss the bank's decision to appoint just 43 members to its lender panel. The meeting was cordial and provided an opportunity for both sides to clarify in greater detail their positions.
I pressed on a variety of issues and concerns with HSBC not least their treatment of solicitor firms who banked with HSBC and had been excluded from the process of creating the new panel.
I do not anticipate any voluntary change of approach from HSBC which means that all affected firms and local law societies will need to redouble their efforts to bring pressure to bear on the bank.
HSBC has now agreed to allow firms excluded or rejected from panel membership to appeal the decision, and has also redrafted the undertakings applicable in separate representation cases the bank remains unwilling to change its overall stance.
While HSBC is convinced of its position, the Law Society continues to have major concerns over transparency and clarity about how the panel operates and how the 43 firms were appointed. There remain serious conflict of interest questions over Countrywide's dual role as panel manager, as well as panel member. Consumer choice is also at risk from HSBC's policy.
Though HSBC is, at present, unpersuaded by these concerns, the current banking sector in the UK is very much under the microscope. Not only are other organisations keeping an eye on banking practices, the public remain cautious.
The Law Society has made clear to MPs, government ministers and others, the impact of HSBC's policy, and in light of the disappointing outcomes from the HSBC meeting we, in partnership with the profession, need to continue along these lines.
Since the president of the Law Society highlighted our concerns with business secretary Vince Cable some MPs have raised the matter with Dr Cable and other colleagues in government.
We continue to urge all solicitors concerned about this matter to contact their MP.
We have made available the campaign tools (PDF) prepared by the Society's Public Affairs department which will enable you to identify your MP, and a guide to preparing letters to your MP, which solicitors may find of interest and assistance.
Some firms have already done this effectively, bringing the matter onto their local MP's radar. A number of members have met with their MP and the feedback has been positive. In addition to the lobbying pack we now also have a template letter for our members to adapt and send to their MP (Word).
All firms that have been unsuccessful when applying to the HSBC panel are encouraged to appeal. I would encourage firms to also contact the chief executive of HSBC (Word). Solicitors who are shareholders or might consider becoming a shareholder will appreciate the additional channels of communication and protest this route may offer.
We are aware that a number of clients are unhappy at the position that HSBC's actions have put them in. Your clients may find the materials we have prepared a useful way of expressing their concerns - please see the template letters prepared:
- client MP template letter (Word) - which solicitors can give to their clients if they wish to raise the issue of solicitor choice with their MP
- client HSBC template letter (Word) - which solicitors can give to their clients in situations where the client has chosen not to use HSBC and may wish to alert HSBC to that loss of business
Where possible also ask them to complete an evidence form (Word) which, once completed, can be emailed to clientchoice@lawsociety.org.uk.
We will begin raising awareness around the negative impact of HSBC's stance through a number of media channels, but we also hope that solicitors with local media contacts to do the same.
For our part, we have already ensured that no Law Society funds are placed with HSBC or any member of the HSBC group.
We have brought HSBC's actions to the attention of consumer body Which? who have issued a statement echoing some of our concerns around consumer choice and I hope to meet with their CEO to discuss these issues further.
I remain unpersuaded that legal proceedings are the appropriate step at present and so we must seek alternative means to ensure our concerns over HSBC's lender panel are heard beyond the realms of the legal sector, that the detrimental impact on consumers the bank's decision has is made aware of and that pressure is felt by HSBC from all quarters.
I will be writing further with details of the next steps we will be taking.
Desmond Hudson, Law Society chief executive