The Scottish Law Agents Society have called for a profession-wide consultation to canvass awareness on the risk of being reported for professional misconduct by the Law Society, after a recent decision of the SSDT.

In the case, a residential conveyancing solicitor was found guilty of misconduct for a failure to report to the lender that a property being purchased had not been owned by the seller for a period in excess of six months as stipulated, and was found to be in breach of the lender’s instructions.

The decision against the solicitor turned on whether, in her professional judgement, certain facts regarding the timing of transactions warranted notification to the lender prior to drawing down funds to settle.

The Scottish Law Agents are polling the profession to assess whether there is sufficient awareness that a breach of the conditions as highlighted in the case could cause proceedings to be raised against the agent by the Law Society, whether or not the lender has complained or has suffered loss.

“This case highlights a number of issues and has caused many practitioners to reflect on whether we should continue to act for both Borrower and Lender in residential Conveyancing,” said Graham Gibson of Kirklands solicitors, who is coordinating the canvassing.

“If you find yourself agreeing that the respondant was entitled to exercise her professional judgement in deciding whether or not to report a matter to the lender, you are at risk and need to review your Team’s CML procedures as a matter of urgency,” he warns practitioners.

“This judgement makes it crystal clear that there is, and never was, any room for exercising professional discretion on whether or not to report a breach. Whether a failure to report will be serious enough to result in a prosecution being raised is a matter of judgement for the LSS Compliance Team.

“However, any failure to report, irrespective of how trivial the breach, may result in a claim by the Lender if they suffer loss on the mortgage.”

The Scottish Law Agents will use the results of the canvas to assess whether any policy changes may need to be proposed to the Law Society.

“The most common feedback I have had is that members were not aware that a breach of the CML rules was a professional misconduct offence. There are a lot of really concerned solicitors out there,” Gibson said.

The decision can be read here.