CFS panel cull deferred pending talks

first_imgThe Law Society has secured a two-week stay of execution for sole practitioners in a ‘first round’ of negotiations over the decision to axe 3,600 practitioners from the conveyancing panel of the newly merged Britannia and Co-operative Financial Services (CFS). Sole practitioners will remain on the new CFS panel until 4 October following discussions between Chancery Lane and CFS. They were given one month’s notice of their removal from the panel in August. The CFS said it had been forced into the move following the merger because otherwise its insurers would have withdrawn cover for the entire business. Law Society chief executive Des Hudson said that following ‘useful talks’ with CFS a further meeting had been agreed ‘to explore the drivers of the Britannia/Co-op decision’. He said the Society was eager for the discussions to continue at a ‘rapid pace’. CFS director of risk Mike Fairbairn said the meeting had been ‘constructive’, but said it had a ‘clear duty’ to obtain the best cover at the best price. Meanwhile, Chelsea Building Society has said it is prepared to take direct action against individual solicitors and firms, and to target the Solicitors Compensation Fund to recoup money it may have lost due to solicitors’ alleged participation in a swathe of mortgage frauds. Chelsea recently said that it suffered £41m worth of mortgage fraud perpetrated between 2006 and 2008, concerning ‘the artificial inflation of property values by third-party professionals’ involved in buy-to-let mortgage transactions. A Chelsea spokesman said its solicitor panel contains a ‘fair spread’ of sole practitioners and other multi-partner firms, as it did at the time of the frauds, and it is not planning any ‘knee jerk’ panel cuts. In a further development, a letter from Bristol & West Mortgages seen by the Gazette has confirmed that it no longer appoints sole practitioners. The bank said the decision was the result of an increase in the number of mortgage fraud cases encountered by them where sole practitioners had allegedly been directly or indirectly involved. The letter mentions the ‘significantly inferior cover offered by the relevant governing bodies for sole ­practitioners’ as a reason for the decision. Bristol & West said the data to support the comments, was ‘private’. Neither Chelsea nor Bristol & West disclosed which solicitors or firms they believe may have participated in the frauds and whether or not they believe panel firms were involved. In a separate statement issued on Wednesday, CFS’s Fairbairn,said: ‘CFS wants to make it absolutely clear that our decision was a direct consequence of our insurers refusing to offer cover on our entire £20 billion mortgage business, unless we removed sole practitioners from our panel. We have a clear duty to our members and customers to ensure best cover at the best price; we can’t simply choose cover at any cost. We also reject strongly any claims that our actions are in anyway discriminatory on sole practitioners, for this same reason. ‘We have committed to maintaining dialogue with the respective law societies [of England and Wales, Scotland and Northern Ireland] but we need to achieve a position where we have appropriate indemnity protection across our entire mortgage book, without any adverse commercial impact or material change to the terms and conditions offered.’last_img

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