TLO Risk Services
Historically, insurers rate the area of conveyancing work as one of the biggest risk area's for law firms when setting a professional indemnity premium. Some insurers are happy with firms who undertake a large amount of conveyancing work, others are far more cautious.
Over the past ten years, conveyancing claims have contributed, on average, to over 40% of claims notifications.
There are many risk areas associated with conveyancing work for law firms to consider. These include:
- Risk of fraud and the increased risk of identity fraud,
- Increased duty of care to both client and lender,
- Large transactional values,
- Cyber Fraud "Friday afternoon"
- Urgency from clients to complete transactions quickly,
- Global economic conditions,
- Increased workloads on staff, and
- Emerging risks in certain property transactions
Emerging risks within the property sector are nothing new. They can occur when a particular type of mortgage is sold or when a specific type of property is purchased.
Generally, law firms can do a number of these transactions. Past issues have included right to buy, properties in overseas developments and properties involving sale and lease back transactions.
Law firms need to consider the risk of becoming exposed to certain conveyancing transactions and to ensure procedures and tests are put in place.
Otherwise, firms could find themselves notifying potential claims if the overall property transaction comes under scrutiny