"The first major criticism of free legal schemes is centred upon the fact that lenders invariably choose the solicitor or conveyancer to represent their client"
While some consumer based organisations have heralded their rise as a money and hassle saving boon to mortgage customers and as a sure fire means of driving up the flow of business to lenders, many experts disparage the range and quality of the provided services and claim that they do little more than to undermine the reputation of conveyancing in the UK. With a major shift in received industry opinion shaking up the market over the past six months, however, this seems like an opportune time to run through the major arguments against free legals and to ask, once and for all - are they worth it?
The first major criticism of free legal schemes is centred upon the fact that lenders invariably choose the solicitor or conveyancer to represent their client, irrespective of circumstances. This raises an obvious issue as to the professional loyalties of the chosen representative and suggests a troubling conflict of interests between the needs of the customer and those of their paymasters. As demand for necessary conveyancing services has grown, moreover, cost considerations and an attendant lack of investment has led, in many cases, to understaffed package solicitors performing high volumes of work for rock bottom fees. This has led, in turn, to heavy backlogs of work, increased reports of error, delays in processing applications, lost paperwork and missed deadlines (sometimes leading to penalty charges). When we factor in the difficulties that customers have had trying to contact their case solicitors and the frustration of dealing with inept or under informed call centre staff, then the innate appeal of inbuilt legal freebies begin to lose something of their lustre.
Indeed, another, rather shocking, factor to consider is that in some cases, free legal work isn’t actually free at all. Customers have discovered that certain types of work, such as transactions relating to a transfer of property or leasehold purchases, have not been covered under their free service packages and that additional charges, often far exceeding the cost of independent legal advice, have been added to the bill.
All of which has led to growing number of brokers calling for mortgage lenders to abandon their conveyor belt approach to legal work and prioritise cashback packages. Which is precisely what has happened. In fact, according to recent data supplied by Moneyfacts, the number of available cashback mortgages has soared by 27% in the last six months and increased in average value by 11%- a rare but pleasing example of an industry responding to the needs and criticisms of consumers and professionals alike. But, it doesn’t quite end there, because if the rise in free legal work has shown us one thing it’s that we need to question the current state of the conveyancing sector in this country.
Changing industry factors such as API and the free movement of banking information have led many experts to forecast a major (and, it could be argued, necessary) shake up of the conveyancing market. Capacity problems and missed income opportunities (sometimes relating to a reported reluctance among brokers to refer clients to good conveyancing firms for fear that it might reflect badly if things go wrong) obviously need to be addressed, but the potential increase in cashback work must surely create a unique and exciting opportunity for a really innovative, customer responsive conveyancing system or company to set new standards of excellence. It’s time to raise the bar- get to it!
