Law Society to hold special general meeting in July as row about conveyancing guidance comes to a head

The Law Society will next month (23 July) hold a special general meeting after the Property Lawyers Action Group (PLAG) requisitioned a debate and vote on a motion of no confidence in Chancery Lane’s ability to represent members who undertake conveyancing.

PLAG has accused the Law Society of failing to consult with members adequately before making changes relating to new guidance released by National Trading Standards Estate and Letting Agency Team (NTSELAT) which affect conveyancing. These changes include changes to the TA6 form.

In a statement PLAG said that at the heart of its concerns was “the idea, blindly accepted by the Society, of sellers being required to provide ‘Material Information’ (MI) before a property is listed for sale".

It added: “There are significant doubts concerning the lawfulness of the guidance issued by National Trading Standards (NTS) regarding MI because of a lack of legal capacity on the part of the NTS.”

In its statement PLAG set out a number of ‘flashpoints’ in relation to MI including:

• Companies are already emerging to provide MI. Are such companies exposing the public to unnecessary liabilities?
• It is naïve to suppose that because of MI potential sellers will necessarily go to their solicitors first, to get help on the TA6.
• Complex litigation could arise if an agent was sued for negligence and sought an indemnity from a solicitor, especially if the data was fragmented, because of the different ‘actors’ in the process.
• The conveyancing system under MI changes fundamentally. Instead of interrogation by a buyer’s lawyer of carefully verified replies given by the seller/seller’s lawyers to enquiries, there would be a single pack of potentially flawed data.
• The TA6 will significantly increase the risk of claims for ‘innocent’ misrepresentation.
• MI means that a seller, would find it much more difficult to defend a claim under The Misrepresentation Act 1967, if the buyer was claiming the seller had made a misrepresentation, even if made innocently.
• MI represents in its effect, a re-engineering of conveyancing ‘by the back door.’
• Because of MI there will be more claims for ‘contractual’ misrepresentation because a buyer does not have to prove ‘reliance’

PLAG warned that current consumer protection laws (CPRs) make estate agents, solicitors, and sellers criminally liable for an ‘unfair commercial practice,’ a ‘misleading action,’ or a misleading omission, a point it said was made by the Society itself in its ‘Practice Note’ on CPRs.

“Despite strict liability for such criminal offences, astonishingly the Law Society appears to have accepted the principle of even higher levels of criminal liability being imposed on solicitors and some sellers merely by giving incorrect replies in the poorly drafted and over-long TA6 form.”

It suggested that the Law Society has “many questions to answer”, claiming amongst other things that Chancery Lane gave no advance warning to the profession, “so that solicitors could put in place appropriate safeguards, to protect themselves”.

In a statement issued on behalf of the Law Society Council in response to PLAG, Chancery Lane said the requirement for “Material Information” or “MI” to be provided in the context of the buying and selling process is a statutory one and has been in place since the Consumer Protection from Unfair Trading Regulations 2008 came into force.

“The requirement has recently been given more prominence with the publication of guidance on MI by National Trading Standards Estate and Letting Agency Team (NTSELAT), in November 2023. We recognise that there are many differing views on that guidance, but we do not see the argument that its publication was outside the powers of NTSELAT, the legislation or case law.”

It said other market players had already responded to the introduction of the NTSELAT guidance. Changes had been made to the estate agents Property Information Questionnaire (PIQ), the Buying and Selling Property Information (BASPI) and to the Rightmove portal.

“Irrespective of the actions of solicitors, other market players are responding to change and opportunity, underlining the need for solicitors not only to be present and heard, but to adapt their approaches where appropriate,” it argued.

“The recent changes to form TA6 aim to ensure that the solicitor profession does not lose step with the wider market. They support the policy aim of creating a better experience for consumers. We acknowledge that it will take time for market participants to establish new norms for producing the required information and managing the cost and risk associated with doing so. The Law Society is here to ensure the collective voice of solicitors is heard in that process.”

The Law Society said that, on specialist advice, it believed the concerns that revisions to TA6 might increase solicitors’ liability to be "unfounded". It added that it had published guidance to reassure the profession, which it would continue to update as needed.

“Concerns about liability are not new and we sought advice from specialist counsel when producing our February 2016 practice note about the Consumer Protection Regulations (CPR). We have recently taken updated advice on the issue from specialist counsel, which supports the position set out in the guidance we have recently published,” it added.

“In summary, we explained in those resources that solicitors should not face additional liability as a direct consequence of the amendments to the TA Forms, under either consumer law, tort or the law of contract provided they are used with due diligence.

“Similarly, we do not believe that the nature of client risk for misrepresentation is different under the new version of the form or that risks are increased materially in practice.”

In relation to consultation on the TA6, the Law Society said it recognised that “if we are to support our conveyancing members in promoting positive change to the home buying and selling process, we need to bring them with us on changes we ourselves introduce.

“Whilst recent changes to the TA6 were developed in line with our established approach and governance structures we can see that more engagement with practitioners was and is needed to ensure that the new edition of TA6 has wider support within its user community.”

It was for that reason, it announced on 14 June its decision to extend the period of parallel running of the current and new editions of form TA6, for a further period until 15 January 2025.

“So, while further consultation is taking place, those firms that have invested resource in being ready to use the new edition can do so, whilst those firms that wish to continue using the current edition pending further consultation will not be in breach of the CQS protocol.”

More information on the SGM and what Law Society members need to do to register to attend can be found here.