The Law Society of Scotland is seeking urgent talks with Santander following the bank's introduction of a compliance fee, which the Society believes is an unnecessary cost burden on solicitors and their clients.
The Society's Chief Executive, Lorna Jack, has written to Santander to protest at the bank's decision to impose the annual fee on residential conveyancing panel members, following the introduction of an online panel management system. The new system will mean an annual compliance check costing over £100 for conveyancers from next spring, to validate information held by Santander. Panel members will be required to upload their indemnity insurance certificate and practising certificate to the system.
Once the new system is fully operational, the panel will be open to potential new members, who will be invited to submit an online application. A fee, which will be subject to review, of £199 plus VAT will be charged for processing an application, whether or not it is successful.
Ms Jack said: “We are very disappointed at the lack of prior consultation by Santander about these changes and have stated our objection in principle to the attempt to recoup operational costs from solicitors.
“We have had a lot of communication with Santander over the past year in relation to panel matters so were surprised that we were not informed or consulted on this change. We would have welcomed an opportunity to provide input to a review of the bank's risk management policies.
“The reaction from our members is that the new compliance charge appears to be an attempt to recoup the operational costs of the new system from panel members. This is unacceptable and we believe such additional operational costs, which ultimately are passed on to borrowers, should be done directly and transparently and not through the medium of agents.
“Additionally such a charge will add to the cost burden of firms at a time when the volume of residential transactions remains at an extremely low level, with statistics published this week by Registers of Scotland indicating that sales in the second quarter fell by more than10% year-on-year.
“The charge will potentially impact more on firms with lower conveyancing volumes and if firms decide to resign from the panel rather than pay the charge this may restrict consumer choice.”
The Society has emphasised to Santander that there is no need to have sight of Practising Certificates and Professional Indemnity policies of solicitors in Scotland as details for every solicitor holding a valid Practising Certificate are published on the Society's website. All principals in private practice are also required to satisfy the Society that they have renewed standard professional indemnity cover, under the Master Policy arranged by the Society, to the minimum level of £2million, meaning the requirement to exhibit or upload such details is needlessly bureaucratic and incurs unnecessary costs for all involved.
Ms Jack added: “We are very willing to work with Santander to improve the effectiveness its panel management system and related processes, in the interests of our members and their clients and are pressing to meet the bank's representatives at the earliest opportunity to discuss this.”
ENDS 08 August 2011
FOR FURTHER INFORMATION: Journalists can contact Emily Young on 0131 476 8204 or Suzy Powell on 0131 476 8115. For the out of hours service please call 0131 226 7411. Email: firstname.lastname@example.org or email@example.com