"Members who are concerned about the actions of Lloyds Banking Group and their proposals to instruct only ARTL using solicitors for mortgage instructions, will take no comfort from developments in England. It has been reported that Lloyds Banking Group (LBG) which includes Lloyds TSB, Halifax, Bank of Scotland and Birmingham Midshires has informed the Law Society of England and Wales that it intends to remove firms that have conducted a low volume of transactions over a rolling twelve month period.

"Both of these issues, the ARTL issue and the low volume factor, have one important aspect in common. That is that in refusing to instruct solicitors who do not satisfy the Lloyds criteria, the mortgage lenders are effectively making it more expensive for borrowers to instruct their own solicitors in their purchase transactions than to instruct solicitors of Lloyds choosing.

"There are probably a number of relevant considerations. Normally a commercial enterprise should be free to instruct whichever solicitors it wishes. Lloyds, however, is a publicly owned business and different considerations might apply. There is also the issue of the solicitor/client relationship. This is of importance not only to the client and to the solicitor in question but also has a public significance.

"If clients instruct their solicitors under pressure from mortgage finance companies, then it is less likely that the solicitor will have genuine knowledge of the client. There may be greater scope for mortgage fraud and money laundering offences (not uncommon events) if the traditional solicitor/client relationship is broken down and replaced by instruction brought about by pressure from mortgage lenders. Views from around the membership are invited."

The webiste of the SLAS can be accessed here.

Bruce Ritchie of the Law Society has issued the following note to The Firm:

"Lloyds Banking Group, which includes HBOS, has announced a review of its residential conveyancing panel in England and Wales and will remove firms that have low volume of business. The Law Society of Scotland has been assured by the Bank that this policy will not apply in Scotland."