CERTIFICATES OF TITLE (Hansard, 15 October 1969)

§ Mr. Graham Page
I beg to move That the Clause be read a Second time.
On the Notice Paper this looks rather a formidable Clause, but it is an effort to simplify conveyancing. We ought not to allow a Law of Property Bill to go through the House without making some effort to simplify the transfer of property. Perhaps I ought to say "property or land", but we are talking generally about the transfer of homes. This is where the law needs simplifying—not, perhaps, in the case of the transfer of massive estates or large blocks of flats, offices or industrial premises, but in the normal conveyancing 488 which goes through any solicitor's office and which is now in a very complicated form, namely, the transfer of the ordinary dwelling house.
Frequently, both inside and outside the House, we hear complaints that the cost of transferring a house from one person to another is crippling, especially in the case of the purchaser and again in the case of a young married couple buying their home and having to find the cost of the furniture and, on top, the cost of the solicitor carrying out the transaction for them.
But when the time spent by the solicitor on this sort of work is analysed it is found that his charges are in no way out of step with those made in other professions. Those charges are statutorily fixed. Therefore, if, on a time basis, the solicitor's charges are fair and reasonable compared with those of other professions, the only way of reducing those costs on the transfer of property is by reducing the volume of work which the law requires to be done—and not which the practitioner makes for himself. The law requires this work to be done in order to provide a purchaser with a good title to the property.
7.15 p.m.
This is what the registration of land endeavours to do. Where property is registered at Her Majesty's Land Registry the work involved in the transfer of the land is much less and, as a result, the costs are lower. They are fixed lower statutorily and the smaller amount of work is recognised in that way. In the case of unregistered land the Bill reduces the work necessary to be done by reducing from 30 years to 15 years the normal length of title. But there will still have to be the examination of at least a 15 years' title, and perhaps a little more. Many deeds will have to be examined, in some cases. There will also be the drawing of the conveyance, which is a comparatively long and complicated document.
In the case of registered land, however, the land certificate or the charge certificate itself is the title, and the transfer is a comparatively simple document. As I have said before, it is most regrettable, that the Government forbad voluntary registration, which could have increased the area of land and properties which 489 became registered. May I ask rhetorically why the purchaser should accept a land certificate as a good title to the property. All that he is looking at is a statement that a certain piece of land or a certain house belong to a Mr. X and may be subject to some restrictive covenants or a mortgage. He is not looking behind Mr. X's title. Why does he accept it as a title to the property when it may have become encumbered before Mr. X acquired it, or when he may not have acquired it properly? It is because the Land Registry ensures that the certificate was right. The purchaser from Mr. X is entitled to rely on the Land Registry's warranty and the certificate, and if it is wrong because of an error of the Registry the person who suffers receives compensation. It is guaranteed to be correct.
Pending the registration of all land, which one hopes we shall progress to in 20 or 30 years, would it not be worth while to have a land certificate for unregistered property, not insured by the Land Registry but in the normal way, by an insurance company? That is what the new Clause proposes—a sort of "Do-it-Yourself" certificate of title. I do not mean to deprive the professional man of his job and his fees. That is the last thing that I wish to do, being a lawyer myself. Perhaps I should have declared an interest. But I see no reason why we should not do the conveyancing in exactly the same form for unregistered property as for registered property, and insure the title.
The insurance of title is a well known and quite common practice at present. Insurance against claims for breach of covenant, where restrictive covenants have been broken in the past, requires only a paltry premium. Then there is insurance for the protection of a squatter's title. If someone has been in possession of property without an adverse claim over a certain time it can be insured. In many ways the insurance of title is well recognised. I see no reason why a vendor should not think it worth while, for the speed of conveyancing and the transfer of his property, to have his own certificate of title, in the same way as if it were registered property, and to insure it. But the Clause goes a step further than that. It proposes that in certain cases even insurance is unnecessary.
490 Let me use the ordinary example of the suburban house. The suburban house these days is normally purchased subject to a building society mortgage. I should think that a very high percentage of purchases is now carried out by means of building society mortgages. In those cases the purchaser's solicitor and the building society's solicitor investigate the title, and simultaneously with the purchaser buying the property and getting the conveyance of the property to himself, the conveyance and the documents of title are handed over by the vendor's solicitor to the building society's solicitor. They remain there till the mortgage is paid off or until the property is sold.
As on an average property is sold every seven to nine years—these are figures given by the building societies themselves—in that period of time the property is sold again aid, as the law stands at the moment, the same process is laboriously carried out—the purchaser's solicitor investigating the title, the new building society's solicitor investigating it, and so on all over again.
Why go through all that investigation again? Suppose that on a purchase, the purchaser draws up his own land certificate which his vendor signs as being correct, and that is put with the deeds which are handed over by the vendor. On the sale, if those deeds have been with the building society all the time, the building society so certifies, and this surely is a good enough assurance to a purchaser that the title of his vendor was good immediately after the vendor himself had purchased and that the deeds themselves have remained with the building society and could not have been charged or in some way encumbered since then. Of course, the present vendor would have to deduce his title subsequent to his purchase, but it would make it unnecessary for he present purchaser to go behind the vendor's title.
There are the proposals contained in this Clause—in one case to have a certificate of title backed by ordinary insurance so that the purchaser would not have to look behind his vendor's title, and in some cases where the deeds have been retained by a building society or bank or insurance company the purchaser should be entitled to accept the title of his vendor without going behind 491 it. This may not be an absolutely watertight form of conveyancing, but it is at least an effort to use this Bill, which after all is called the Law of Property Bill, to meet the difficulties which are now suffered by those purchasing property.
I am disappointed that the Government have not done something in this Bill to simplify conveyancing and to reduce costs. This is a matter which has been raised again and again in the House and it is high time that something was done about it. May I assure the House that solicitors do not want to charge the costs they are charging if the work is reduced. Solicitors do not want to do the sort of work which the law requires them to do at present when there are simpler ways of doing it for which they need not charge so much. They would earn their living by greater production of conveyancing in quicker time than by taking the money for obeying an antique and obsolete law in many cases.
I hope that we may have some response from the Solicitor-General and that at least this new form of conveyancing might be tried out so that the costs and the time of conveyancing might be saved.

§ The Solicitor-General
I recognise and appreciate the amount of study that has gone into this proposed new Clause and the background to it. In putting to the House that it is wise in all the circumstances to resist the Clause, I do not want that to be regarded as in any way derogatory to the observations that I have just made; nor do I really expect to persuade the hon. Member for Crosby (Mr. Graham Page) as to the merits of my reasons.
This Clause is designed to simplify unregistered conveyancing by eliminating much of the work by deducing title to property on a sale. The Clause enables the vendor to require the purchaser to accept a title going back no further than the date on which the vendor acquired his title. A vendor may take advantage of this right, it is proposed, if he does three things—if he deposits his documents of title in safe custody with a bank or other institution when he acquires the land; if he agrees to insure the purchaser against loss arising from a defective title; and if he produces a certificate of title 492 verified by various persons concerned, a certificate of title similar to the land certificate issued by the Land Registry in relation to registered titles.
The Clause produces a scheme of considerable elaboration which could only be accepted, we feel, if acceptance were warranted after the most thorough consultation with the Law Society, the Law Commission, the banks, building societies, insurance companies, the Land Registry and other interested bodies. Of course, the need in certain circumstances for such a scale of inquiry and investigation is one which, it can reasonably be argued, should be fulfilled. It could be said that these researches and inquiries should be carried out. But an inquiry on that very considerable scale, if it took place in the context that the House is at present considering, would be taking place during the few remaining years of transition from the unregistered to the registered system of conveyancing.
The House will remember that it is hoped that compulsory registration of title will be extended to all urban areas in England and Wales by about the end of 1973, and I think it is reasonable to ask the House to remember, therefore, that we are considering a possible improvement in the context of impending change.
7.30 p.m.
The proposal in the new Clause would complicate the careful examination of title which is required when a title is produced to the Land Registry for first registration and it appears to be unlikely to offer the prospect of a substantial reduction in the cost of conveyancing. I say that because I would have thought that the kind of risk that the new Clause contemplates as an insurable risk will have the result that insurance premiums are likely to be substantial. There is some reason to think that the insurance companies would not be immediately responsive to the proposal.
It is on the whole rather unattractive in principle to purchasers, who normally prefer to have the land they have bought rather than an indemnity for its loss, such as is here proposed. The content of the new Clause seems similar to an earlier scheme, the title certificate book scheme, which was devised by the Law Society in 1965. It was rejected by my noble Friend on the ground that it would 493 not produce sufficient advantages swiftly enough to effect any substantial reduction in costs before the registered conveyancing system was extended over most of England and Wales.
If that decision was right when it was given, and I believe it was, then that conclusion is a fortiori a sound one now. So far as the new Clause concerns reduction of work in deducing titles, as the hon. Member for Crosby said, it offers little more than is already provided by Clause 22 of the Bill, which reduces from 30 to 15 years the period for which title can be required to be shown, since many vendors have owned their land for 15 years or more. Vendors who have owned land for less than 15 years are unlikely, we think, to wish to insure the purchaser unless the title really is defective.
I recognise the work that has gone into this and I can assure the House that this matter has received careful consideration. I am doubtful whether I would have persuaded the hon. Member, with the reasons I have put forward that the new Clause should be resisted, but I feel bound to emphasise the substance in these reasons.

§ Mr. Graham Page
Anyone can pick holes in a new procedure. It cannot be produced as watertight at the very outset. I recognise the strength of some of the criticisms which the Solicitor-General has put forward. Where he must have disappointed the House was in giving us no indication that the Government realise the importance of this subject. To say that we are in the transitional period, moving towards all land being registered land, is the height of optimism. I cannot believe that at the rate compulsory registration is proceeding we will get anywhere near that by 1973, or even 1983 or 1993 unless a very great increase in the staff is achieved at the Land Registry. I do not think that there are the professional people to staff it to that extent.
I would have hoped that the Solicitor-General could have given some indication that the Government intended to carry out the sort of research and consultation he mentioned. He said, correctly, that it is a scheme of some elaboration—it is also of some simplification. It would need consultation with a great number of bodies but this is an important matter. 494 Do the Government not intend to carry out any consultations of this sort? Can he give the House any assurance that they will make a serious effort to reduce the costs of conveyancing?
A few years ago the Law Society put forward a scheme, I am not arguing for or against it, of the title certificate book, which the hon. and learned Member has mentioned. All that it got from the Lord Chancellor was a bucket of cold water. He said that any scheme of this sort would be overtaken by registration of all land and at the same time he stopped voluntary land registration. That seems to be the only real contribution, or supposed contribution, to conveyancing. It is very disappointing that the Solicitor-General has not given the House some assurance that the Government really consider this to be an important matter, not just a legal matter but one affecting the pockets of ordinary people.

§ The Solicitor-General
I can give that assurance now. We recognise that it is an important matter, but that does not affect the reasons I have put forward.

§ Mr. Graham Page
It follows that if the Government recognise it as an important matter they should consult with all those people the Solicitor-General has mentioned and see whether some better scheme for conveyancing cannot be devised