Solicitors in move to ban cut-price house sales

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The Independent Online
STEPHEN WARD

Legal Affairs Correspondent

The Law Society faces one of the stormiest meetings in its 200-year history tomorrow when thousands of solicitors try to force the profession to ban cut- price conveyancing.

Only the 65 members of the Society's council will be allowed to vote on a proposal to introduce minimum fees which would double the cost of buying or selling a house for most people. But scores of solicitors are likely to converge on the headquarters in London to lobby before the meeting.

John Edge, a Bournemouth solicitor, has led a campaign in recent months to force action over conveyancing fees as low as pounds 150. He claims to have the support of 11,000 solicitors, almost one-fifth of the profession.

For years the Law Society has argued that it is not allowed under the law to introduce a restrictive practice, but in the first contested elections for 40 years, the anti-establishment candidates for president and deputy, Martin Mears and Robert Sayers, pledged to find a way.

They believe they can do it by refusing the Law Society's indemnity insurance to solicitors who refuse to charge the minimum fees. Cheap solicitors would then have to insure themselves on the open market, a far more costly process, and not a genuine option. A consultation document prepared by Mr Sayers, the vice-president, for this week's meeting argues that firms which offer cut-price conveyancing are cutting corners and making a disproportionate demands on the insurance scheme, the Solicitors Indemnity Fund. A minimum fee of pounds 250, plus half a per cent of the house price - not including VAT, land registration and searches - is suggested.

Consumer groups argue that the way to deal with shoddy work is to police the profession better, and not to stop efficient firms from undercutting others. The proposed guideline would take the cost of conveying a pounds 75,000 house to pounds 625. The Law Society has found that three out of four houses are currently conveyed for less than pounds 300.

Mr Mears will attempt to push the controversial proposals through the council and, if successful, ask for comments from the profession and rulings on the legality of the move.

A fixed scale of fees, enforceable by law, was abolished by the Government in 1972, but fees remained high until the mid-1980s when genuine competition was introduced by the abolition of the solicitors' monopoly on conveyancing and an Act allowing solicitors to advertise.

Under the Solicitors Act, for a price-fixing agreement to be allowed it needs to be accepted by the Master of the Rolls, who would have to be persuaded that the move was in the public interest.

Aware that the 65 council members are likely to be cautious about the change, Mr Mears plans to begin the meeting with an attempt to change the voting system so that a record is kept of how each person votes.

Mr Mears, elected president this year in the first contest for the post in 40 years, conceded the move would not be popular but argues it is not in the consumer's interest to have professionals on the cheap - he maintains that the public needs to have professions it can trust.

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