Regulators criticised by Council of Mortgage Lenders
Legal regulators, particularly the Solicitors Regulation Authority (SRA), have come in for criticism from mortgage lenders.
In its response to the Ministry of Justice review of legal regulation, the Council of Mortgage Lenders (CML) said lenders were baffled by the “plethora” of regulators and had lost confidence in legal professional standards due to “significant solicitor fraud”.
In conveyancing, especially, it said “several competing professionals operate; solicitors, licensed conveyancers, and legal executives, all three having a separate regulator and rules by which they must adhere.
“In addition, there is a limited understanding of the role that the over-arching regulator, the Legal Services Board plays, from a client perspective”.
While the CML accepted there could not be “a single monolithic approach” to every issue, it suggested clients would rather there was a “certainty of approach” and “consistent standard across the various professionals who may all work on the same conveyancing file”.
It criticised both indemnity insurers—for aggregating claims “so as to reach liability limits quickly”—and the SRA.
“A majority of our members have expressed concerns about the compensation arrangements provided by the SRA,” it said.
“In particular, they have reported that they have been held to a far more stringent set of standards when claiming from the solicitor’s compensation fund, than they would have been held to under their own regulator, and as a result, very few of the claims they have made have been successful.
“Long delays in dealing with claims were also reported, although we are aware that the SRA are working to clear the backlog of claims they have with the compensation fund.”
An SRA spokesperson said the regulator did not wish to comment on another organisations’s response to
the review.
