Technology in Conveyancing – Opportunity or Threat?
The technology revolution is transforming conveyancing, from big ideas such as the Land Registry’s ambitious plans for the digitisation of Local Land Charges to online chain management and electronic transactions.
As the conveyancing profession employs a greater use of technology to improve efficiency, enhance due diligence and streamline processes, so the threats increase from criminals able to exploit the online revolution.
As more business is transacted online and firms rely more on online systems so the threat increases from cyber criminals attempting to obtain mortgage funds by fraud or by the creation of vendor firm clones to steal client’s money.
Conveyancing Solicitors are in the front line and as well as having to deal with online fraud and money laundering are also vulnerable to professional indemnity claims from their own clients and lenders. As criminals become more sophisticated and client’s become more litigious, spurred on by the latest No Win No Fee phenomena of solicitors suing solicitors for negligence, the problem is only going to get bigger.
Conveyancers are expected to utilise the range of services available to them to safeguard their client’s transaction. Lack of awareness of these services isn’t likely to be accepted as a defence when faced with a claim.
New World – Don’t Panic!
So what can conveyancers do to help themselves?
Firstly don’t panic! As the conveyancing world changes, it can easily seem daunting. However, you don’t need to be particularly IT literate to survive or even compete and thrive in it.
Conveyancing is a vibrant and dynamic area of the legal profession and barely a week goes by without another innovation designed to reduce risk.
It is important to be aware of and employ those services which mitigate risks. By doing so you can be seen to be exercising reasonable skill and care, which, after all, is all that can be expected of you.
Website Security – First and foremost is the security of the online services that you use, how easy is it to hack and for criminals to gain access to your client’s information? There are two quick ways for you to test this; does the website address begin with https and show a locked padlock before the web address? If so then the website is secure and uses encrypted data making it harder to get into. Secondly, you should have a password to gain access. This password should not be visible to anyone including the owners of the website. You can test this yourself by phoning your service provider and asking for your password, if they are able to give it to you then it is recorded somewhere which means it can be obtained and used fraudulently.
Vendor Firm Clones – Lawyer Checker is a commercially available service, with a database which determines whether the bank account searched against has a track record of successful use within conveyancing. Although acting innocently the results of being duped by a bogus law firm could be devastating for a firm including removal from lenders panels, stress, distraction and brand damage.
Electronic AML Checks – These are an excellent way to support your Customer Due Diligence and help ensure you are meeting your obligations under the Money Laundering Regulations 2007. As well as matching personal data with recognised and reliable sources such as the Electoral Roll they also provide matches against negative information sources such as mortality databases, PEPs and Sanctions Lists from all over the world.
Search Alerts – These are widely available and used by most online search providers. A property is screened against various databases to reveal if a hazard is present, which could affect your client’s purchase. These include hazards which you may not be aware of such as; planning applications, energy exploration schemes and infrastructure projects. Searchpoint is the leader in this type of screening, providing you with a report which you can give to your client. The report details the hazards that have been screened for with the results in a traffic light format. This shows thorough screening on behalf of the solicitor but also provides protection, as it is up to the client if they wish to order additional searches, the solicitor has done their bit in informing the client of the potential problem.
Land Registry Freehold Boundary Mapping – This is a new feature which is starting to appear on a number of search provider websites. The freehold title boundary that surrounds a property is automatically shown when a case is created. This helps ensure the searches are ordered on the right property. It can also save time when ordering searches as you don’t have to find and attach a boundary plan. Instead, you have the option to select the freehold boundary as registered at Land Registry via an interactive map.
Using technology can never entirely eliminate risk, however, embracing it will help reduce those risks that are real and present in the 21st century, most importantly it shows that you have acted responsibly and with reasonable skill and care. For Conveyancers, ignoring technology and the risk management tools that are available could be the biggest risk of all.
Tony Clarke – is Operations Director of Searchpoint, an online search partner. More information can be found at www.searchpoint.co.uk