Residential property specialist, Kayleigh Curtis, explains the stringent conditions to be satisfied before the same firm can act for both the buyer and seller.
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This is a question that crops up pretty regularly – and I quite understand why. From a client’s perspective, if one solicitor was acting for both parties, surely there would be scope to speed up the conveyancing process by removing the need for two solicitors to review and deal with the same documents. Certainly, no time would be lost in communication between solicitors, and might there also be an overall saving in legal costs?
However, as a general rule, this practice is not allowed, although it is permitted if specific criteria are satisfied.
What is a conflict of interest?
Both the Solicitors Regulation Authority and the Law Society have strict rules for solicitors to follow to avoid a ‘conflict of interest’. This is to ensure that your solicitor always acts in your best interests, ie puts you first.
In most conveyancing transactions, if the same solicitor acts for both parties, there is a strong chance of a conflict of interest arising. This could be over something as simple as a difference of opinion over the proposed completion date.
Criteria for a firm acting for a buyer and seller
Exceptionally, if specific criteria are met, the same firm can act for the seller and buyer, but only when both parties have a substantially common interest or they are competing for the same objective. In these circumstances, both buyer and seller will be required to provide their consent for the firm to continue to act on the sale and purchase.
The regulations say this can only be considered where:
- both parties are already longstanding clients of the firm; and
- where it is clear that both parties are fully aware of the risks.
And even then, the same solicitor will not be permitted to act for both buyer and seller. Each solicitor must also be subject to separate supervision to ensure they are not privy to personal information about the other party to which they would not usually have access if a different firm of solicitors represented that party.
But that’s not all…
Where the same firm is acting, each party must understand and accept that their solicitor will not be permitted to negotiate on their behalf. This means that any of the issues that commonly arise regarding the survey, purchase price, fixtures, fittings and contents, completion date, and other timescales, must be left to the estate agents, who must be made aware of the potential conflict of interest.
A conflict may also arise if a party asks their solicitor to withhold information which could have a detrimental effect on the conveyancing transaction.
What happens if a conflict of interest occurs?
Should a conflict of interest occur, both solicitors will have to cease acting immediately, and their clients advised to instruct new solicitors, inevitably resulting in delay – and greater cost.