Now we are 10

Amongst other notable anniversaries this year, 2011 marks the 10th anniversary of the founding of the Property Standardisation Group (“PSG”).

The idea for the PSG came from discussions amongst lawyers at Dundas & Wilson, McGrigors, Shepherd & Wedderburn and Maclay Murray & Spens during a break for coffee while they were at a session at the Scottish Law Commission, advising on the reform of the law on irritancy of leases.

The general theme of those discussions is still encapsulated today on the PSG website (www.psglegal.co.uk). We all have our own precedent documents which are designed to address the same issues and which do so in broadly similar fashion. Can’t we agree certain standard forms for some of the documents, for the benefit of clients and lawyers alike to speed up transactions and cut down on costs? The clients aren’t interested in minor quibbles between lawyers over the terms of what they perceive as relatively standard documents.

The result was the establishment of the PSG in June 2001, comprising transactional partners from two of the four firms and senior professional support lawyers from the other two firms. The current representatives are Douglas Hunter of Dundas & Wilson, Rachel Oliphant of McGrigors, Ann Stewart of Shepherd & Wedderburn, and Iain Macniven of Maclay Murray & Spens. Douglas followed Hamish Hodge as the Dundas & Wilson representative after the first few years of the PSG’s existence. Mention should be made too of Russell Munro, who lent sterling assistance to the PSG while Rachel Oliphant had a spell on maternity leave.

Track record

We quickly realised that there were others in the profession interested in our project and we wanted to expand membership of the PSG to include all interested firms. We had to avoid the dangers of drafting by committee though, so we agreed to retain the core founder members for drafting the documents and the other firms agreed to act as consultees reviewing the PSG drafts before they were published. The consultees have performed an invaluable role over the years. The firms in question are Anderson Strathern, Archibald Campbell & Harley, Biggart Baillie, Burness, DLA, HBJ Gateley, McClure Naismith, Morton Fraser, Murray Donald Drummond Cook, Paull & Williamsons, Pinsents, Thorntons, Tods Murray, Warners, and Wright Johnston & Mackenzie.

So what has the PSG achieved in the last 10 years?

• It has produced a suite of precedent documents, freely available to the profession and other interested parties, covering standard lease management documentation, land reform, purchase/sale of property and SDLT amongst other matters, each precedent being accompanied by guidance notes, which often contain a helpful summary of the background legal issues and set out the rationale behind various provisions and how to tailor them to the circumstances.
• It led the way for the profession by producing new documents and drafting when new legislation came into force, such as SDLT and the abolition of the feudal system.
• It has provided clear evidence that law firms, while in daily competition for business, can cooperate for the benefit of client and lawyer alike.
• It has provided evidence too that major law firms with substantial commercial property practices and teams can give something back to their colleagues in the profession.

The impact has been clear. A number of the documents are regarded now as standard in property transactions. This enables the lawyers on each side of a transaction to agree that the relevant PSG precedent will be used, safe in the knowledge that it fairly represents the respective interests of both parties and can be agreed with scarcely a mark of the electronic pen on it, other than to complete details of the parties.

In addition to general use in practice, the PSG documents are used by a number of universities as teaching materials in their property courses.

Quiet revolution

The PSG’s efforts have also been recognised by the award of Project Team of the Year at the Scottish Legal Awards, Innovation in Legal Services Award at the Law Awards of Scotland, and Highly Commended in the Financial Times Innovative Lawyers Awards.

The PSG has also sown the seeds of a revolution by changing the historic way purchases and sales are dealt with in Scotland by streamlining:

• the due diligence process to be carried out by the purchaser through the use of a comprehensive, standardised due diligence questionnaire (similar to CPSE enquiries used in England & Wales); and
• the negotiation of the sale contract by requiring the seller’s lawyer, who is fully familiar with the property (as opposed to the purchaser’s lawyer who often knows nothing about it beyond what can be gleaned from heads of terms), to prepare the sale contract using a standardised form of contract suitably tailored to the transaction in question.
• Numerous multi-million pound deals for the acquisition of shopping centres and other investment properties in Scotland have been completed in the last few years using that PSG documentation, such as:
• sale of Cameron Toll Centre, Edinburgh in 2008;
• sale of North Ayrshire Retail Park, Stevenston in 2010;
• purchases of a number of retail investment properties (e.g. 118 and 127-128 Princes Street, Edinburgh);
• sale of a portfolio of over 40 properties from the Kilmartin receivership.

All in all, the PSG is probably entitled to celebrate the fulfilment of what may have started out as – and here I stretch a point – a bunch of kids with a crazy dream. We look forward to what the next 10 years has in store for the PSG. As the landscape in which we practise is constantly evolving, we’re sure there will be many more interesting challenges which the PSG can help the profession to address.