HC Deb 19 March 1984 vol 56 cc700-1
38. Mr. Blair

asked the Attorney-General if he will introduce legislation to prohibit solicitors from acting for both the borrower and the lender in a mortgage transaction.

The Solicitor-General

No, Sir.

Mr. Blair

Does the hon. and learned Gentleman not accept that there is a vital need to ensure that the interests of consumers are protected where solicitors, or indeed other organisations, act for both the borrower and the lender in a mortgage transaction? Will he at least try to see whether legislation can be introduced to ensure that those acting in such circumstances urge the consumer to take independent advice?

The Solicitor-General

I agree with the hon. Gentleman about the need for consumer protection. Recently, the Government made it clear that they took the view that that was extremely important. The solicitors' practice rules ensure that solicitors do not act for both sides when a conflict arises. Solicitors in private practice already act for the lender and the borrower in mortgage transactions. Building societies usually appoint the purchaser's solicitor to act for them once the offer of a mortgage has been accepted. Both sides then have a common interest in ensuring that the title has been properly established.

Mr. Lawrence

Is not the problem to which the hon. Member for Sedgefield (Mr. Blair) has just referred not all that dissimilar from the problem of conflict of interest that would arise if building societies and banks were allowed to convey property?

The Solicitor-General

The Government have made it clear that we need advice and are consulting upon how problems of conflicts of interest can be overcome in the circumstances to which my hon. and learned Friend refers.

Mr. Bowen Wells

Does my hon. and learned Friend agree that in many cases it would speed the transaction greatly if the solicitor acted for both sides, always taking into account the question of conflict of interest? Will he refer this question, among others, to the interdepartmental committee that is to consider all matters appertaining to house transfer?

The Solicitor-General

My hon. Friend, who was one of the sponsors of the House Buyers Bill, knows that the Government have given a wide remit to the two committees, the setting up of which I announced in the middle of last month. Of course, speed is facilitated by solicitors acting for both sides, but that is not the only consideration. As I know my hon. Friend acknowledges, one must have regard to possible conflicts of interests, and it is on that that we need to consult. I think that we shall obtain some useful information.

Mr. John Morris

May I endorse the concern that has been expressed about the Government's proposal to give the right to convey to building societies—a concern that I expressed in the debate on the House Buyers Bill? The hon. and learned Gentleman says that the problems can be overcome, but what thought has he given to that and in what way can the problem of conflict of interest be overcome?

The Solicitor-General

The Government are seeking advice on this. It is not for me to say how such problems can be overcome, although I gave it as my view in the debate to which the hon. and learned Gentleman has referred that they are not insuperable. I and others think that it is a good deal more reliable to take a wider sample of opinion, and that is what the Government are doing.