Dear Colleagues,
I am pleased to inform you that the Law Society has reached an
agreement with HSBC regarding its residential conveyancing panel.
While continuing its campaigning activities the Law Society had,
following an approach from HSBC, also engaged in discussions with
them with the intention of reaching a solution that is suitable to
our members, consumers as well as HSBC. We believe that together we
have achieved that aim.
Following those talks, HSBC will now introduce a two tier lender
panel which will see all firms with the Law Society's Conveyancing
Quality Scheme (CQS) in the second tier of the panel and able to
act for both lender and customer on a joint representation basis.
CQS firms do not need to apply to be on the panel but are
automatically part of the second tier.
HSBC had initially created a panel of only 43 firms that could
act on a dual representation basis, meaning that there were much
higher incidents of separate representation.
Following HSBC's agreement with the Law Society customers can
now choose a CQS firm safe in the knowledge that HSBC will also be
able to instruct that firm reducing delay and additional work.
The first tier will feature firms, including the initial 43, who
have signed up to the criteria of the discounted fees structure
overseen by Countywide and the no sale, no fee deal.
The second tier firms will not be bound by these criteria.
The third option remains available for borrowers who wish to
choose another firm of solicitors or conveyancers not in the two
options above. In this instance, as was previously the case, the
borrower will pay 160+VAT for a panel firm to complete the
legal work required by HSBC.
HSBC has committed to providing its customers with a detailed
and balanced explanation of all these options. Obviously these
changes will take some time for the bank to introduce, but HSBC has
committed to having this new tiered approach in place by August
2012.
There was some reluctance to welcome CQS sole practitioners onto
the second tier, but we highlighted the value of sole practitioners
and the high standards of CQS sole practitioners prompting HSBC to
go some way in acknowledging that by allowing CQS sole
practitioners to act for both the bank and the customer in cases
where the mortgage value is 150,000 or less. The Law Society
and HSBC will continue to work together to improve this
arrangement.
In practice this means that HSBC has gone from a panel of 43 to
one of more than 1,400 (2,000 CQS outlets) by aligning itself with
CQS in that way. This is not only good news for consumers but for
CQS members. There is no doubt this solution gives HSBC mortgage
customers wider choice and it has been achieved by the collective
effort of the profession and influence of the official
representative body, the Law Society.
The Law Society ensured that the impact of HSBC's original
policy remained high on the agenda with an effective national,
regional and social media and public affairs campaign, but what
gave that campaign so much additional resonance was the way in
which you, our members, responded to this issue and I am encouraged
that when required solicitors can act in unison. Using the Law
Society's tools, such as the template letter to MPs, and the
echoing of the Law Society's media messaging by members in their
local media, together we helped HSBC to commit to tackling the
problem.
I would like to thank all those members who took part in the Law
Society campaign and would ask that you also pass on our thanks to
your clients, many of whom, at your encouragement, provided us with
information to support the campaign.
Undoubtedly, those efforts played a major part but we were also
working with a bank which was actually keen to listen and work with
us to find the right alternative.
From the Law Society and the profession's view, this augers well
for the future. We needed to pull together. We did. The Law
Society, as the representative body was able to coordinate a
campaign, to channel members' views and to provide a point of
contact for the bank when it was ready to enter discussions, to
secure a better solution to its own challenges.
We deliberately left the door open to HSBC and it paid off.
Of course, in an ideal world all solicitors who carry out
residential conveyancing would be able to act for both lender and
customer on a joint basis, but times have changed and that was
never an option for HSBC or any other lender anymore. A trend that
is emerging is that CQS is becoming established with lenders. With
HSBC now backing the scheme wholeheartedly, Santander requiring CQS
for new applicants to its panel and recently Clydesdale and
Yorkshire Bank also requiring CQS membership for lender panel work,
not having CQS risks reducing the chances of panel membership.
I believe that there is much more that the CQS can offer to
assist HSBC and the wider lending community in its desire to
improve the experience for the house buyer. The scheme was designed
in order to develop rather than stand still, and I look forward to
working with HSBC and other lenders to develop CQS so that we can
deliver this support at no cost to the bank or its customers.
Desmond Hudson, Law Society chief executive
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