Consumers to lose out from Co-op conveyancing panel decision
Oct 28 2009 by Tom Scotney, Birmingham Post
Consumers, as well as lawyers at small firms, have been hit hard by the decision by the Co-op to take sole practitioners off one of its legal panels.
Co-operative Financial Services took 3,600 solicitors off its conveyancing panel.
And the Law Society has described this as bad news for consumers, as it means those who live in rural areas could struggle to get access to legal advice
A spokeswoman for the Law Society said: “This is extremely bad news for consumers as it means those who live in smaller towns or in villages around the country may not be able to use the solicitor of their choice when buying or selling a house or a flat.
“More worryingly solicitors may go out of business depriving the community of local legal advice and therefore removing access to justice. For many sole practitioners conveyancing work subsidises legal aid. Legal aid is there to provide access to justice for those who cannot afford it and so the risk to those people who may have to rely on legal aid is high.
“The outrageous thing is that the decision by the Co-op completely contradicts their ethical policy. The co-operative movement was founded on principles of having positive impacts on communities around them, however this move could have a disastrous effect on a local community who rely on a local solicitor for conveyancing, drafting wills, attending police stations, defending criminal proceedings and general legal advice. Those solicitors could end up going out of business, depriving a local community of an essential service and greatly affecting access to justice in the local area.”
CFS, which is the financial arm of the Co-op, recently merged with Britannia and Platform Home Loans.
The Co-operative Financial Services is the group of businesses that includes The Co-operative Insurance and The Co-operative Bank including Smile and Britannia.
In September CFS gave sole practitioners one month’s notice of their removal from the Britannia conveyancing panel. CFS cited insurance difficulties as the reason for their decision.
Staffordshire-based Britannia and CFS became the country’s first “super-mutual” when they opened for business in August.
The merger set up what the two groups described as an “ethical” alternative to shareholder and Government-owned banks.
More than 450,000 Britannia members voted by a majority of 88.6 per cent at the society’s annual general meeting in Birmingham in April to support the merger. The first-ever merger between different types of member-owned businesses combines the personal and corporate banking and insurance businesses of Manchester-based Co-operative Financial Services with Britannia’s high street savings and mortgages expertise.
The effect of combining CFS with the UK’s second-biggest building society has created a new institution that will have £70 billion of assets, nine million customers, 12,000 employees, more than 300 branches and 20 corporate banking centres.
But the Law Society said: “Co-op repeatedly claim that they offer an ethical alternative to shareholder and government owned banks and constantly claim that they do business in a socially responsible way to make a positive impact in the community and in fair trade.
“Needless to say any move that deprives sole practices of business could result in them going out of business causing unemployment if they employ admin and secretarial staff, cleaners etc including the knock-on effect of their suppliers. The Law Society is calling on CFS to do the responsible thing and reconsider.”
