Society publishes independent review of consumer protections for homebuyers

The Law Society of Scotland has published a report today, 12 February, following an independent review of consumer protections for people buying and selling property in Scotland.　　

The review, by former Sheriff Principal Edward Bowen CBE QC, examined the current consumer protections in place as well as conveyancing practice and the existing legal framework.

It followed high profile and complex cases in Aberdeenshire and West Lothian where clients were left without proper title to land bought through residential property transactions.

The Law Society provides a number of consumer protections for people using Scottish solicitors. This includes its Guarantee Fund, a fund of last resort which seeks to compensate clients who are the victims of a solicitor’s dishonesty. The Society also arranges for the Master Policy, a single policy of professional indemnity insurance, to ensure firms are covered for cases involving negligence.

Sheriff Principal Bowen concluded that the cases in Aberdeen and West Lothian arose for very different reasons and were highly complex and unusual, and did not suggest a fundamental problem with conveyancing practice.

His report makes a number of recommendations, including:

• Consideration of the widening of the scope of the Guarantee Fund, and a possible change to the name of the fund to avoid confusion.  Some changes would be likely to require changes to the legislation governing the fund.
• Amending the guidelines for discretionary powers for the Guarantee Fund to provide discretionary assistance in restricting continuing losses in certain circumstances.
• Possible introduction of a new system of protection for purchasers of newly constructed houses to protect from insolvency. This would have to be brought forward by Scottish Ministers.

President of the Law Society of Scotland, Alistair Morris, said: "We have an important duty to protect the interests of the consumers of legal services, a responsibility which we take extremely seriously.

“The vast majority of Scottish solicitors provide an excellent service for their clients, but we need to ensure that we have a robust set of consumer protections to help clients in those very few occasions when things go wrong.

"These difficult and very complicated conveyancing cases in West Lothian and Aberdeenshire left some questioning if the existing protections are sufficient. That is why we commissioned an independent review to look at the issues arising from these cases, current conveyancing practice and existing Scots law, to see what lessons can be learned for the future.

"I am very grateful to former Sheriff Principal Bowen for carrying out such a thorough analysis of these issues.

“Overall, the report provides reassurance that there are no fundamental or underlying problems with Scots property law and solicitors’ conveyancing practice. It is notable that Sheriff Principal Bowen has concluded that the cases in Aberdeen and West Lothian arose for very different reasons and were highly complex and unusual.

“These findings are reassuring for both the legal profession and members of the public who rely on the knowledge and expertise of their solicitor when buying a new home. We fully appreciate however, that it does not provide much comfort for the people currently going through the dispute over ownership of what they thought were their homes. We are continuing to liaise with those concerned to discuss how outstanding issues can be progressed. 

“Sheriff Principal Bowen has made a number of recommendations, several of which are being considered through the separate independent review of our Guarantee Fund which is currently being carried out by KPMG. We will be taking forward actions in response to the other recommendations whilst some of the suggestions made, such as the establishment of a possible new fund for homebuyers, would be a matter for Scottish Ministers.”

ENDS 

Notes to editor

The report can be found on the Law Society website: Consumer Protections in Conveyancing Cases

FOR FURTHER INFORMATION: Please contact valeriemcewan@lawscot.org.uk