ARTL, by degrees

It’s good at what it does; if used regularly it would become second nature; but there are too many exceptions and these are not being addressed quickly enough.

Such sentiments appeared to dominate the “knowledge exchange event” on 16 February focusing on e-conveyancing and especially ARTL, hosted jointly by Glasgow Caledonian University and Glasgow Solicitors Property Centre.

Perhaps the most striking feature for me emerged when the meeting split into breakout groups to encourage feedback from the 40 or so solicitors taking part. Although nearly all in my group were registered and trained for ARTL (including some early adopters), none had actually used it in a live transaction. Other groups reported much the same.

More than one of those present reported in addition that the ARTL clause in the Glasgow-Edinburgh standard missives is routinely deleted, and practice carries on as before. So what are the obstacles and why has it not proved more attractive as an option?

Round-the-table comments in ARTL’s favour were that it eliminates error and builds SDLT into the process. So what were the downsides?

Giving hassle

Lenders’ attitudes came up first, and their refusal to release a discharge until the loan had been repaid. But, in addition, the IT was said to be “a hassle”, along with the fact that its use is confined to straightforward transfers on the Land Register. As someone said, “You want it to work all the time.” As things stand you can’t get a momentum going with it or achieve any economies of scale.

The banks’, and not just Lloyds Group’s, “arrogance” is not winning them any friends, whether through their insistence on solicitors using the system when they don’t embrace it properly themselves, or other obstacles such as (Barclays, it was said) only accepting certificates sent by post, or (Bank of Scotland) taking up to five days to process a fax. And there is still a feeling that the Law Society of Scotland should have done more to stand up to them. Another comment was: “It’s not a stick that’s needed, just to be shown that it’s a joined-up way of working that benefits clients.”

But the system is slowly picking up. Whereas in the early days virtually every ARTL transaction related only to securities, there are now 70 title transfers a month – still a small enough proportion of the 3,000 ARTL dealings in the two months to mid-January, on the Registers statistics reported in the Journal, which itself contrasts with the 30,000 paper transactions submitted to the Land Register in that time, but an increase nonetheless, whether due to the Lloyds Group policy or otherwise.

Left wanting more

The meeting also heard from David Preston, one of the two Society representatives on the steering group that oversaw ARTL’s development. While still convinced of its benefits, he readily agreed that there were simply too many exceptions where ARTL could not yet be used for it to become second nature to the profession as it should, and criticised the Registers for not having made more progress in the last four years towards broadening its use. ARTL was, he said, supposed to be capable of dealing with 80% of Registers transactions, but was nowhere near able to do so yet.

Quoting one young solicitor of his acquaintance as saying “it’s good for what it does, but it doesn’t do enough”, Preston commented that the more computer literate generation now coming into practice will not be put off by the fact that a program doesn’t always work first time, but rather will just “go and do something else” while they are waiting if a computer has to be restarted. The concept is sound, he asserted; the system is beneficial; and it is coming. And he suggested that some of its critics were just looking for excuses not to use it.

The attitudes of those now coming into the profession were illustrated by Debra Clapham, of Claphams, Glasgow and senior Diploma conveyancing tutor at Glasgow University. Feedback from her students who had been trained on ARTL transactions as part of the course showed the “Facebook generation” as confident about using the system and working through any problems, and indicated that the best way to learn is through peer teaching; “I would have benefited from that”, Clapham commented. If the students can get through the exercise quickly, the profession can, she reckoned – and predicted that it will soon be trainees who are best placed to help their firms adapt.

To give them their due, Registers were represented at the workshop and agreed that there were difficulties, including getting lenders (none of whom were there) to make better use of the system – only 12 of the 28 registered for ARTL regularly do so. It seems that solicitors are not the only ones who find the size and institutionalised systems of lending organisations difficult to deal with!

Registers also emphasised the benefits both to firms and clients from the elimination of errors by using the system; the fact that the SDLT form can be completed in 90 seconds; and the ongoing support available for those still unfamiliar with the process.

Only the start

Those who resist adopting ARTL should keep a weather eye on the progress of the Scottish Law Commission’s 2010 Report on Land Registration, with its annexed draft bill. Commissioner George Gretton was there to give the meeting the wider picture, and in particular the future for e-conveyancing (i.e. including missives), a subject to which he believes the Scottish Government civil servants are attaching some priority.

Gretton even ventured a date – 4 January 2014, or less than three years hence – by which full e-conveyancing might become a reality. If the Land Registration Bill makes an early appearance in the legislative programme following the Holyrood election in May, he may be proved right.

ARTL, on Gretton’s description, is only a “stopgap”: if the Commission’s proposals become law, any deed could be submitted to the Land Register, or indeed the Register of Sasines, in electronic form. No compulsion, on present plans – though the Keeper has been collecting views on whether ministers should have power to make such prescription at a suitable point, on the view that the more applications going through e-registration, the costlier it will become to provide two separate methods.

Could it happen? Lawyers do not take kindly to compulsion, as witness the Lloyds saga last year, but even the non-users present, when asked for a show of hands as to whether it should come about say in two years’ time, were willing that it should. Though as our chair, Moira MacMillan, observed, the result was the reverse of a poll taken ahead of the meeting.

It may not yet have made a dramatic impact, but one can sense that the ARTL tide is creeping in, and it is not one that is likely to be reversed.