The CML believes that in the vast majority of cases the joint representation of lender and borrower is more efficient, more cost-effective and more clearly in the consumer interest.
CML director-general Paul Smee said: “In the vast majority of conveyancing transactions, where the interests of the borrower and the lender are very closely aligned, we fail to see how mandatory separate representation can possibly be in the consumer interest.
"Given that existing rules already provide for separate representation where conflict of interest does arise, we urge the Law Society of Scotland to think again. We continue to invite constructive engagement with the LSS to review and, if necessary, refine the lender's handbook to ensure that both lender and borrower clients' interests are properly protected."
And the CML said that compulsory separate representation has the potential to cause considerable and unnecessary duplication of work and costs and increase the risk of delays in transactions.
In its response to the LSS it states the consultation document has not been written in a balanced way, overtly favouring the arguments for separate representation with little evidence to support the assertion of routine problems with joint representation.
It believes the view of the CML has been misrepresented in the consultation paper as it has never been the CML's position to support this rule change.
Smee said the position of the LSS is in direct contrast to the Law Society of England and Wales which has made it clear it favours the retention of joint representation as the norm.
Members of the LSS will be voting on a potential rule change in September that would, if passed, require this step.
The CML said its response reiterates members’ clear preference for joint representation to continue as the norm in residential conveyancing transactions.
It argues a rule change is a disproportionate response in advance of any conclusion to the separate review of conveyancing issues and practice which the LSS is currently undertaking.
Current LSS rules and the section of the CML lender’s handbook, standard conveyancing instructions to solicitors, already provide for separate representation in the minority of cases where this is required, for example when a conflict of interest might exist.
And the CML said it has repeatedly offered to constructively take forward any necessary discussion on aspects of the handbook where refinement would resolve any concerns or issues.
If, despite these concerns, the LSS members vote through the rule change the CML urges it to adopt a sensible implementation period of at least 12 months or more to avoid the transition problems that “hasty” implementation would bring.
Smee said: “A poorly considered rollout of the rule change could adversely impact the housing and mortgage markets in Scotland and consequently many members of the LSS.”
