RBS- First Active Conveyancing Panel Information

We are not aware of any intention on the part of the CML to develop such a search facility.

The Scottish Law Society has suggested that solicitors should check their lender panel status prior to accepting client instructions to act. The advice is lender-agnostic as it does not relate specifically to solicitors on the RBS- First Active conveyancing panel. The suggestion arises from the practice of a number of mortgage lenders who remove solicitors from their panels without prior notice as part of their panel management system, which can lead to some solicitors discovering this only once instructed. This is sensible advice as a client finding out midway through a transaction that their lawyer is not on the approved lender panel is very frustrating and can lead to complaints. Many online consumer forums contain posts where someone is complaining about finding that their lawyer is not on a lender conveyancing panel. Such forums include mumsnet.com

In operating open conveyancing panels, lenders such as RBS- First Active face a number of fraud and negligence risks. While there is no authoritative source of data on lender exposure to solicitor–led mortgage fraud, anecdotal evidence from lenders indicates exposure on individual cases are often in the millions of pounds. The National Fraud Authority estimates that £1bn per year is lost in mortgage -related frauds in total, which is seen as a conservative estimate.

These risks are exacerbated by the lack of a comprehensive set of data on all conveyancing firms (which, for the avoidance of doubt, would include solicitors and conveyancers across the UK) which is in a readily accessible format. Currently, lenders vet the suitability of their panel firms against a variety of disparate, incomplete and potentially inaccurate sets of information. One top 5 lender pointed out to us that it is almost impossible to track individual fraudsters who move from firm to firm, especially where they are no longer registered or no longer hold a valid practicing certificate.

RBS- First Active and other lenders are in varying stages of reviewing their approach to vetting firms on their conveyancing panels, to ensure their ongoing exposure to unsuitable firms is reduced. There is also regulatory impetus on lenders to ensure that they have satisfactory oversight of their third party panels, including a due-diligence process.

What you should do largely depends on the reason that your firm has been removed off the RBS- First Active conveyancing panel. The top 3 reasons are as follows:

1. lack of transactions
2. the lawyer is a sole practitioner
3. as part of the HSBC panel reduction.

In these three circumstances it is unlikely that you would expected to take any action. Disclosure and other compliance considerations are more likely to be relevant if the reason for removal is due to breaches of lender requirements or allegations of fraud or negligence. Whether the reasoning should trigger a disclosable 'material' breach will depend on the firm and the circumstances around possible failures to comply with the SRA Authorisation Rules, and the SRA will judge each case on its own merits. Factors such as the detriment or risk of detriment to clients, the scale of the issue and overall impact on the firm will need to be considered in deciding whether a failure is 'material'. As the compliance officer you will need systems to identify patterns of breaches. Even if you don't consider there to be regulatory implications the firms COFA should give some thought to whether she/he needs to take any action as result of being removed from the RBS- First Active conveyancing panel.

In the circumstances please explain on the form what steps you have taken to discover the reasons behind cancellation of your RBS- First Active panel status. In particular please provide details if you have received communications from the lender. E.G. before cessation of your panel membership did you receive any letters or calls from the lender putting you on notice?

You should communicate with RBS- First Active to obtain standard documents. The The Council of Mortgage Lenders Handbook includes an explicit section for lenders to establish who to contact to obtain standard documents. RBS- First Active in their Part 2’s state: It is likely that you will need to quote your RBS- First Active solicitors panel reference.