HSBC's decision to cut down its conveyancing panel is bad for clients

Solicitors interested in residential property work will undoubtedly be familiar with the ongoing HSBC debacle.

For reasons best known only to itself, HSBC has decided to trim its panel to just 43 firms, some of whom are licensed conveyancers.

Its panel management has been outsourced to Countrywide (apparently themselves also on the panel) to allocate cases to firms. Some will take only joint representation cases (acting for lender and borrower) others will take both those and separate representation cases where they are representing only the bank.

It appears that HSBC were sufficiently naïve above the conveyancing process that they did not anticipate the delay and then frustration which would be suffered by their customers.

The cost of lower fees

Clients wishing to use their own solicitor (and there are a great many of those clients) must pay HSBC's additional costs. Included in this cost is a referral fee for services rendered to Countrywide. HSBC contend this will help them in the fight against fraud but have not seemly identified how it will do so.

Perhaps the most pernicious part is the bank's insistence on driving down fees to a level which many think will be unsustainable but is ostensibly for the benefit of a client. HSBC cannot surely expect us to think that they are sufficiently benevolent that they are doing the general public a favour. It is obviously a strategy designed to try and sell mortgages although interestingly the recent FSA review cautioned banks against such strategies.

One would surely think that the banks interests were better served by a greater level of due diligence, more care being taken over what are often intricate legal matters, encouraging firms to invest more in education and training. All of those things cost money, yet pushing the price down will do nothing to enhance those very values which the bank (and its regulator) seeks to encourage.

When it comes to fraud the position is starker still. Banks and other lending institutions have been very quick to accuse the profession of treating the problem lightly. Some frauds and their perpetrators are very sophisticated. It requires skill, knowledge and heightened awareness to make sure you do not fall foul of those who seek to be dishonest. It would be surprising if the bank were to admit that it had bought the cheapest software to guard against computer hackers, yet it seems to be delighted that it has bought the cheapest legal advice to protect its own security, all the while protesting its value.

The Law Society has been taking the fight to HSBC, both in the broadcast and print media, and lawyers are writing letters to their MPs asking questions at a senior level, both in the government and the bank. Consumer groups, sometimes quick to criticise the profession, have been shown that we are prepared to fight on behalf of our disadvantaged clients.

Acting in the best interests of our clients is not only in the list of principles which as solicitors we must adhere, it is also hotwired into our psyche. We know that clients will be disadvantaged by the bank's action and have not been afraid to say so, whether it is HSBC or anybody else, long may that continue.