The Legal Problem
A tangled web w
Lawyers have to put up with a lot of stick but bearing the brunt of the bridging industry’s gripes and groans may be a thing of the past. Sarah Davidson fi nds out how bridging’s relationship with lawyers is changing
“I hate solicitors with a vengeance,” says Laurence Goodman, managing director at Bridgebank. “This industry carries a high level of frustration and most of that is dealing with third parties; certainly solicitors acting for borrowers who don’t necessarily respect their own client’s demands, don’t respect their own client’s timescales and needs and just plod along at their own pace. The client blames us for not getting the money out but the ball has been sitting in their solicitor’s court for the last fi ve weeks and he’s done nothing.”
He claims most of the solicitors
he’s met aren’t very good at what they do and have a sense of self- importance that is unjustifi ed. That creates a huge amount of anxiety, stress and frustration. “If lawyers were more commercial off the bat and did what they were paid to do properly without trying to score points off the other side, which they seem to love doing, it would be a lot better for the industry,” he says.
STRONG WORDS. While there are few people in the industry brave enough to be so blunt as Goodman, it’s fair to say he isn’t alone in his views. Another vocal challenger of many lawyers who get involved in the bridging market is Steve McColl, investment
6 BRIDGING INTRODUCER MARCH 2012
partner at Soho Corporate. “My view is solicitors should get their heads down and get on with the task that they are being paid to do,” said McColl in the January issue of Bridging Introducer. “In other words complete the documentary requirements and get the funds drawn down for their client, and keep ill-thought-through comments to themselves.” It was a comment that sparked heated debate and defence of the role played by the legal profession in many bridging transactions. Goldsmith Williams, a fi rm of solicitors specialising in conveyancing, responded to McColl formally defending the profession. (The full letter is published on page 12). John Jones, director for
development and learning at Goldsmith Williams Solicitors, said: “I agree with him that solicitors should not comment on whether or not a particular loan product is suitable for a client – the client has already had that advice from their IFA – but the solicitor has a duty of care to the client to ensure that he or she fully understands the legal implications of the mortgage they are entering into, that their title is “good and marketable” and that any concerns or doubts they may have are addressed.
“Remember it is the solicitor who is certifying that the title is good security for the loan. This carries important responsibilities for the solicitor as well as the liability if something goes wrong; a situation that others in the transaction do not face.”
In the past two months brokers, solicitors and lenders alike have acknowledged that the status quo in the bridging market might be in need of a rethink. Too often when there’s a hitch in a bridging deal, fi ngers are pointed at the lawyer. But is the lawyer to blame or is it the way the industry has constructed its relationship with the legal component that is holding things up?
TWO SIDES OF THE COIN Jones identifi es the nub of the issue in his defence of the legal profession in bridging. The problem appears to be less on the lender side of the fence and more on the client side of the fence. In other words – it’s not me guv, it’s him. While the legal technicalities of a bridging transaction are rarely markedly different from the legal technicalities of a mainstream mortgage, historically the bridging market has engaged two sets of lawyers to deal separately with the borrower and the lender.
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