The Law Society has advised solicitors to "decline to engage" with HSBC panel firms on the basis that English loan documentation issued by HSBC exposes them to "unacceptable risk."

"Documentation which has been issued by the panel firms is based on English conveyancing law and practice and requires both the purchaser's solicitor and the seller's solicitor to grant undertakings, some of which may be difficult to honour," the Society said this morning.

"The Society's advice is that solicitors should decline to engage with the panel firm on the basis of this documentation, as it exposes them to unacceptable risk."

The move follows the announcement last month that ony four Scottish firms would be appointed to HSBC's panel of solicitors in Scotland, a decision that was branded as restrictive by the Scottish Law Agents Soicety..

Ross MacKay, convener of the Society's Property Law Committee, said: "Now that we have had sight of the documentation being issued on behalf of HSBC we have serious concerns that buyers' solicitors are being placed in an invidious position by being asked to deal with paperwork which is patently not fit for purpose."

He added: "Regrettably it seems that a system patently designed for England is being imposed on Scottish practice, to the detriment of both public and practitioners."