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Home-buying costs could be cut by €1,000 if conveyancing ‘monopoly’ broken

Consumer watchdog suggests legal profession acting out of self-interest in area of conveyancing

Legal Services Regulatory Authority report calls for powers to require solicitors to be more transparent about their conveyancing costs. Photograph: iStock

Conor Pope Consumer Affairs Correspondent
Tue Apr 16 2024 - 06:00

At least €1,000 could be cut off the administrative cost of home-buying and the time the process takes dramatically reduced if the legal profession’s “monopoly” on conveyancing was broken, the chairman of Ireland’s consumer watchdog has said.

Brian McHugh of the Competition and Consumer Protection Commission (CCPC) expressed disappointment that a report on the legal aspects of home buying published last week failed to outline a timeline for openingthe conveyancing system to competition.

The report from the Legal Services Regulatory Authority (LSRA) called on the Minister for Justice to give it powers to require solicitors to be more transparent about the costs of their conveyancing services.

It was one of three priority reform areas along with greater awareness among consumers to help them make informed decisions when seeking conveyancing services and the digitisation of the system.

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Mr McHugh told The Irish Times he welcomed much of the report but said the “main disappointment” was the “lack of a timetable for opening up the competition. We feel it is a big missing part of the package that consumers need to make a difference in terms of price and time.”

He said in “a monopoly like this companies don’t compete against each other so they’re not out there fighting for consumers” as he suggested the legal profession was continuing to act out of self-interest.

The CCPC and the competition and consumer authorities that preceded it had been calling for the legal processes involved in buying a home to be opened up for 40 years, he added.

“We have quite an archaic system so there’s not a lot of digitisation within solicitor practices [and] to some extent our archaic system reflects the monopoly and that ultimately impacts on the price that consumers pay.”

He pointed to New Zealand where conveyancing “takes weeks and costs hundreds of euros but in Ireland it will take months and costs thousands”.

He also highlighted the benefits of breaking the monopoly to the mortgage switching market. “We’re always out there telling people to switch mortgages and we know one-third of consumers are put off by how long it takes and by the cost, and part of that is conveyancing.”

He said a new profession would not automatically “take a huge market share. What happens is that solicitors up their game and start to use technology, prices fall and the time it takes gets better for consumers. The problem in a solicitors’ monopoly isn’t the solicitors; the problem is the monopoly.

“We know the legal profession will naturally protect the legal profession [and] monopolists quite like their monopoly so that’s not a surprise. Lobby groups will lobby for their particular interest but for us the real message is to Government, it is a Government decision.

“For us it is very clear this monopoly can be ended, we see it in other jurisdictions and should be able to deliver significant consumer benefits. This reform has been mooted for 40 years. Consumers have been waiting a long time.”

He said “generally the legal sector in Ireland has been slow to reform. It is still a very paper-based system. I do think there is an increasing appetite for change and to move to a modern system and that’s why now is the time to make this decision, to provide a date, start the process and not to ask consumers wait any longer.”

He accepted change would not happen overnight and suggested that the moves to introduce fresh legislation to establish a stand-alone conveyancing profession could begin this year if given Government backing.

A spokeswoman for the Law Society said it was continuing to review the LSRA report and said it had “seen the comments from the CCPC and are happy to engage with them on any concerns they have”.

A spokesman for the Minister for Justice Helen McEntee said the “complex considerations associated with the introduction of a profession of conveyancer as laid out in the report” would be examined in detail. “Both the Minister and the Government are ambitious to achieve further progress and modernisation in this field,” he said.

Conor Pope

Conor Pope

Conor Pope is Consumer Affairs Correspondent, Pricewatch Editor and cohost of the In the News podcast

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