Law: Lenders get tough with singles - As banks and building societies put more restrictions on solicitors acting for borrowers, sole practitioners fear they may lose out, says Sharon Wallach

LENDING institutions are tightening up their policies on sole practitioners acting for borrowers, according to Nicholas McFarlane-Watts, an Oxford solicitor who runs the National Association of Sole Practitioners (Nasp).

Nasp maintains a database of the instructions policies of all mortgage lenders, listing those that will instruct sole practitioners, those that will do so provided certain conditions are met, and those that will not. 'Whatever the lending institutions say, there is a problem. I have noticed more and more restrictions from lenders,' says Mr McFarlane-Watts. In some cases, he says, these are camouflaged - for instance, they say they want a smaller panel of approved solicitors.

The Law Society takes up allegations of discrimination against sole practitioners with the offending body. 'Not a day goes by without us questioning lending institutions' policies,' says Karen Aldred, head of property and commercial services at the society.

'We are totally opposed to any restrictions on sole practitioners. We are, however, supportive of measures relating to quality and standards, without, of course, abrogating our responsibility for monitoring and regulating the profession.'

She accepts that ultimately it is up to individual institutions to make commercial decisions about the type of solicitor to accept on to their panels. 'If they want, for example, to limit the numbers in a particular area, we cannot argue.'

The restrictions are affecting not only sole practitioners, Mr McFarlane-Watts says: 'Some of our members tell us that two- and even three-partner firms are being treated in the same way.'

The profession at large is bearing the brunt of tighter procedures at Abbey

National. Amid some controversy, the bank has published new terms and conditions for appointment to its panel of approved solicitors. 'These merely formalise our existing guidelines,' an Abbey National spokeswoman says.

However, some of the new conditions have caused a flood of protest. One cause for concern was the rule on verifying the borrower's identity. 'Obviously, we carry out checks ourselves, but this has been a source of some problems in the past,' says the spokeswoman. 'We're just asking for a back-up check.'

The most controversial issue was 'right of inspection'. 'Some solicitors thought it covered all their files,' says the spokeswoman. 'But we mean only correspondence between us and the solicitor, and the deeds. We are not asking to see anything that is client confidential, and we will always attempt to make an appointment first.' The measure, she says, 'should be welcomed by the vast majority of solicitors as a way of cutting out the possibility of fraud'.

In a joint statement with the Law Society, published in the Law Society's Gazette this week, the bank attempts to clarify its position and to reduce the sting of its original message. 'It is hoped that the profession will recognise that Abbey National is taking proactive measures to combat fraud, and, in this, seeking the support and assistance of the solicitors whom it instructs,' the statement says.

It also proclaims the bank's stand on the sole practitioner. 'Abbey National's new procedures do not penalise sole practitioners in any way. Abbey National has no intention of excluding sole practitioners from its panel.'

Despite a fear among conveyancers that other lending bodies will follow Abbey National's example, none has so far done so. But a spokesman for the Woolwich says that it is reviewing its procedures: 'We accept business on its own merit and will continue to do so while we are awaiting recommendations from the Council of Mortgage Lenders.'

Earlier this month, the council responded to the Law Society's consultative paper on 'the cost of default'. The paper canvassed measures to combat increasing claims on the society's compensation fund. Many of these arise from the defaults of sole practitioners, although such offenders make up a small proportion of the total.

One measure already decided upon is the introduction of tighter controls on solicitors' compliance with the accounts procedures, including routine monitoring of sole practitioners. Another possibility explored in the paper is the capping of grants from the compensation fund to institutions.

In its response, the council welcomes the proposals for tighter controls, particularly on sole practitioners. It adds that in view of the growth in claims, 'further, more stringent measures' may be required.

The council is not in favour of capping, seeing it as a retrograde step that would be 'unproductive both in financial terms and in terms of stemming solicitor dishonesty'. The minimal saving involved would, among other effects, damage the profession's reputation and, more particularly, that of sole practitioners.

Preventive action would be more effective, the council says. Accounts-monitoring visits to sole practitioners should be made more frequently than at the two-year intervals suggested by the Law Society. They should also cover compliance with practice rules. The council admits that while in reality most lenders instruct sole practitioners, 'those lenders which, in the light of current trends and their own experience have decided to tighten procedures in this area, have been requested by the Law Society to review what it sees as 'discriminatory practice'.'

It says it 'very much doubts if it is appropriate that sole practitioners can emerge from the present exercise without 'special' restrictions on their operation'. It wants to see sole practitioners authorised to hold client money only after checks on their accounting systems and compliance with rules, and the introduction of a routine requirement of an accountant's report every six months.

The Law Society, which holds regular liaison meetings with the council, is 'actively looking at some of its practical suggestions,' says Ms Aldred. 'We welcome them and we will be taking them forward.'

Nasp is less sanguine. Part of the association's function is to fulfil a lobbying role. Mr McFarlane-Watts says: 'We attempt to persuade the council that most sole practitioners are very honest people. Personally, I don't believe we will change their hearts and minds.'

News
Ian Thorpe had Rio 2016 in his sights
people
Sport
world cup 2014A history of the third-place play-offs
News
Tommy Ramone performing at The Old Waldorf Nightclub in 1978 in San Francisco, California.
peopleDrummer Tommy was last surviving member of seminal band
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
The Mexico chief finally lets rip as his emotions get the better of him
world cup 2014
Voices
Spectators photograph the Tour de France riders as they make their way through the Yorkshire countryside
voicesHoward Jacobson: Line the streets for a cycling race? You might just as well watch a swarm of wasps
Life and Style
lifeHere's one answer to an inquisitive Reddit user's question
Life and Style
Several male celebrities have confessed to being on a diet, including, from left to right, Hugh Grant, Benedict Cumberbatch and Ryan Reynolds
...and the weight loss industry is rubbing its hands in glee
News
peopleDave Legeno, the actor who played werewolf Fenrir Greyback in the Harry Potter films, has died
Arts and Entertainment
'Eminem's recovery from substance abuse has made him a more potent performer, with physical charisma and energy he never had before'
arts + entsReview: Wembley Stadium ***
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

C# Developer (HTML5, JavaScript, ASP.NET, Mathematics, Entity)

£30000 - £45000 per annum + Benefits + Bonus: Harrington Starr: C# Developer (...

C# Integration Developer (.NET, Tibco EMS, SQL 2008/2012, XML)

£60000 - £80000 per annum + Benefits + Bonus: Harrington Starr: C# Integration...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice