The Scottish Law Agents Society have criticised the decision of HSBC bank to restrict its panel of solicitors to 43 across the UK, with only four of those understood to be in Scotland.

The Society said this morning that the decision “artificially restricts the consumer's freedom of choice in the appointment of a solicitor by making the solicitor of his first choice more expensive by virtue of not being on the lender's panel."

SLAS secretary Michael Sheridan also warned that the measure would remove a defence against money laundering provided by High Street firms.

“The exclusion of the High Street solicitor obstructs the public policy of prevention of money laundering because the solicitor's personal knowledge of his client is the best possible defence against the identity deception which enables money laundering to be effected,“ he said.

“The commoditisation of conveyancing services around a small number of big players seems likely to impersonalise the operation and to promote the opportunity for mortgage fraud.

“It seems ironic that, just as we are waking up to the conclusion that the near (hopefully) destruction of the international economy was brought about at least in part by allowing banks to become "too big to fail", a small number of big players in the mortgage market are able to use their domination of that market to implement a policy which restricts choice in the market place, promotes money laundering and drives down the standards to which customers have become accustomed,” he added.

Last week, Ross MacKay, convener of the Law Society of Scotland's Property Law Committee, said: "We are very concerned at the lack of consultation with solicitors' professional bodies both here and in the rest of the UK. HSBC's decision introduces a very restricted panel of solicitors firms which can act for both the bank and their customers in the purchase of a property and ends the bank's long-standing practice of allowing all qualified solicitors to carry out the security work.

"The move restricts the freedom of homebuyers to choose their own local solicitor to act in the whole transaction, by imposing on them a separate charge of almost £200 unless they agree to use an HSBC panel firm.”