14. Conveyancing: A Bright Digital Future?

Professor Stewart Brymer

A. Introduction

We are all accustomed to how heritable property transactions work – and sometimes do not work. If we were creating a property transfer system from scratch today, what would it look like? Indeed, how might a conveyancing system operate in, say, 2050? Is it too fanciful to suggest that transactions will be carried out electronically from start to finish with electronic paperwork, electronic examination of title and a clean and accessible Land Register holding all information relative to land and property in Scotland with experienced property lawyers advising clients on the important aspects of the transaction assisted by trained legal executives? This essay aims to look at the conveyancing process as we know it with a view to assessing how close we are today to that vision becoming a reality.

B. Conveyancing Past and Present

Prior to the enactment of the Conveyancing and Feudal Reform (Scotland) Act 1970, the Land Tenure Reform (Scotland) Act 1974 and prior to the Land Registration (Scotland) Act 1979, there had been very little change in conveyancing law and practice. Indeed, the pace of change could be said to have been somewhat glacial. The combined effect of the aforementioned statutes was radical given the introduction of inter alia the Standard Security; redemption of feu duty on sale; and registration of title. The first two statutes were the result of earlier analysis of Scots property law by the Reid, Henry and Halliday Reports.1

There was little further in the way of legislative intervention in the area of property law until 2000. That was not to say that the Scottish Law Commission was not busy however.2 The result was the enactment of the Abolition of Feudal Tenure Etc. (Scotland) Act 2000; the Title Conditions (Scotland) Act 2003; and the Tenements (Scotland) Act 2004 which all came into force on the Appointed Day.3 If there was ever a significant date in Scots property law, that was it. We are now some ten years on from the Appointed Day and the Scottish Law Commission has completed another highly regarded review of registration law and practice.4 The 1979 Act has been criticised over the years, most notably when it was described as having, “all the intellectual sharpness of a mashed potato,”5 but the fact of the matter is that the Act has worked and solicitors and the public generally have benefited from registration of title. The time was right for a complete overhaul of the system however. This resulted in the enactment of the Land Registration etc. (Scotland) Act 2012 (“the 2012 Act”), Part 10 of which6 came into force on 11 May 2014 by virtue of The Electronic Documents (Scotland) Regulations 2014.7 These Regulations were introduced under the 2012 Act, the balance of which came into force on 8 December 2014. The Regulations prescribe the requirements for electronic signatures that will allow documents covered by the Requirements of Writing (Scotland) Act 1995 (“the 1995 Act”), with the exception of Wills and other testamentary writings meantime, to be signed by applying a suitable electronic signature and thus be both legally valid and self-proving. This means that contracts for the sale, purchase and leasing of land and property can be completed electronically instead of in writing with a “wet” signature being applied thereto. For more on this, see below.

There has been considerable change in the practice of conveyancing during the past 45 years. There will be some who argue that these changes have not had any major effect on the practice of conveyancing and, in any event, that the profession has adapted to change and will continue to do so. That may well be the case. Nevertheless, in a lecture given in 1998, Professor Robert Rennie said: “Some conveyancing solicitors look back to the past with nostalgia and forward to the future with a degree of trepidation.” It is suggested that the full implications of the 2000, 2003 and 2004 Acts have not yet been felt and, when combined with the enabling provisions of the 2012 Act, the changes to Property law and Conveyancing law and practice in particular will be significant. There are those who believe that any change is unwelcome. The combined effect of the pace of change in today’s society and developments in IT over the past 30 years dictate against that view being an acceptable position however. The World Wide Web was only created in 19908 and look at the effect that that has had on our lives. Who would have predicted that? These developments are exponential and all-invasive in every aspect of our business and personal lives. Is there any reason why conveyancing should be immune from such changes? I suggest not.

In a thesis written in 1989, Ian Burdon, then with Registers of Scotland, concluded that:9

The present millennium began with feudalism and reliance on the literacy of the clerical elite. The vision of the beginning of the next millennium is of an automated land registration system alongside a fully integrated digital information system, unencumbered by those administrative and bureaucratic structures which serve only to impede the public.

In the preface to our book entitled “Conveyancing in the Electronic Age,”10 Robert Rennie and I stated that we hoped that there was considerable future potential for Scotland to develop land registration coverage with additional content that meets the needs of a much more informed and information-hungry society. That is precisely what is now happening with the 2012 Act and the Scottish Government’s desire to see the whole of Scotland on the Land Register during the course of the next 10 years.11 That may be seen as an ambitious target by some,12 but is there any reason why such an objective cannot be achieved? The political will exists and Registers of Scotland have shown how responsive they can be in embracing all the statutory obligations on them under the 2000 and 2003 Acts and also under the 2012 Act. The Keeper’s challenges are considerable but there is an enthusiastic and well-informed team in Registers that is engaging with its stakeholders and can see the potential that exists. The benefits of the Land Register being completed are social and economic as well as political and it is appropriate that we consider the benefits that this may bring. Change is all around us and it is suggested that it is better being involved in the change process rather than being outside the tent looking in. Life without change would mean that there would never be any progress.

So, what are the changes introduced by Part 10 of the 2012 Act and how will those changes impact on conveyancing law and practice?

(1) 2012 Act ss 96-100 (“Part 10”)

Credit for what has been a formidable piece of work in the shape of the 2012 Act must go to the Scottish Law Commission and to Professors George Gretton and Kenneth Reid in particular. The profession is indebted to these two individuals. They have played a pivotal role in reforming the Scots law of property over the past 35 years while, at the same time, retaining the underlying principles established over the last 400 years. Credit must also go to the Registers of Scotland and to the Scottish Government for having the vision to progress the statutory timetable through a period of economic uncertainty.

Part 10 makes changes to the 1995 Act so as to make digital execution equivalent to a traditional “wet” signature. In essence, it e-enables all the documents referred to in s 1(2)(a) of the 1995 Act. Digital signatures are, of themselves, not new of course as the profession has had experience of using the whe undertaking transactions involving Automated Registration of Title to Land (“ARTL”).

ARTL was introduced in 200613 when an Order made changes to the 1995 Act for the purposes of ARTL. The introduction of this change by secondary legislation under s 8 of the Electronic Communications Act 2000 came about following a Joint Opinion of the so-called Professorial Panel (Professors Brymer, Gretton, Paisley and Rennie – Professor Reid being excused given his then role with the Scottish Law Commission) which was delivered to the then Keeper of the Registers of Scotland (“RoS”) in April 2003 and later published in the Juridical Review.14 Digital execution under ARTL was a necessary first step. Originally, it was proposed that a digital signature would still require to be witnessed in order to be probative. The view of the Professorial Panel was that the conferring of probative status on an unwitnessed deed was beyond the scope of a Section 8 Order. However, there is no requirement on the Keeper to only accept probative deeds in respect of land registration applications. Accordingly, the unanimous view in the Joint Opinion was that the Keeper was perfectly entitled to accept a digitally executed deed without the need for that deed to be probative. Authentication by way of a digital signature which is validated by a third party gives the degree of security that is required for those placing reliance on such deeds.

The 1995 Act was suitably amended and in his annotations to the amended 1995 Act,15 Professor Kenneth Reid indicated that in the case of electronic documents, the distinction between probative and non-probative deeds was abandoned. ARTL was subsequently introduced and is still in use today16 – although not as widespread as originally envisaged. There are a number of reasons why this is the case, the principal and somewhat non-technical explanation being that its operation is somewhat “clunky” and in need of an overhaul. In truth, ARTL was not embraced fully by conveyancers and was not widely used in transactions other than remortgages, Improvement Grants and certain Charging Orders. Such an overhaul will be undertaken and an upgraded version of ARTL will be launched by RoS (Registers of Scotland) in due course. This is also permitted under Part 10. In the words of Gilbert, it is easy to “carp and criticise” about anything in life and developments in the law and practice are no exception.17 In the case of ARTL, however, one would do well to reflect on just how ground-breaking the system was and what other benefits it will bring when upgraded as part of the move towards Scotland having a fully digitised Land Register. Could ARTL have been introduced in a different manner? With the benefit of hindsight, this is undoubtedly the case. It is hoped that ARTL Mark 2 will be introduced and that practice will develop as a result of demand from the profession. That will occur once all the other building blocks for digital transactions are in place and we see that purchasers, sellers and lenders want to transact in this way. That will complete the change process which will begin after the Designated Day for the 2012 Act when a large number of services will be provided by RoS in an electronic manner.

(2) What is a Digital Signature?

The term “digital signature” is in many ways a convenient tag for the authentication of a document by electronic means. There are many variations including machines that allow a signature to be traced which then appears on a screen. Indeed, such systems could have been adapted for use in such a way that an electronic signed deed could have accompanied an ARTL application. That is not what would be regarded as a digital signature in a technological sense however. The crucial element is not the digital signature itself but the digital certificate which provides the security for the adhibition of the signature and which thus underpins same. In strict technological terms, the certificate is used to create the digital signature which is a product of the actual document and the digital certificate together. This detail is suitably encrypted and lies behind the signature.

In the ARTL system, the digital certificates comply with the X509 standard.18 As a general rule, the longer the length of cryptographic keys, the stronger the encryption. For example, a 20BIT key is twice as strong as a 19BIT key and so on. A digital signature with a robust encryption such as the ARTL digital certificate is therefore very secure and one might remember that in the not so recent past, a digital certificate with a key length of over 56BITs was classed as a military weapon for export purposes and special licences were required. What is important is the strength of the digital certificate. In other words, not every digital signature can be used in the knowledge that it is secure. Put simply, a cheap digital signature obtained on the internet on a credit card payment is never likely to be acceptable for the processes envisaged by Part 10 because the digital certificate which is used to adhibit the digital signature is simply not secure enough. Any digital signature has to be one which is backed by a digital certificate trusted by people in a business and commercial context. It is not just the technological content that is important. Of particular importance for property lawyers given the uses to which a digital signature is to be put in conveyancing transactions is the identity check which is made by the provider of the digital certificate before that certificate is issued.

As mentioned above, in a very basic sense, an electronic signature could be simply a name at the end of an email or an image of a person’s written signature added to an electronic document. Neither of these would meet the terms of the requirements set out in the Regulations. An advanced electronic signature is uniquely linked to the signatory and is capable of identifying the signatory. It is created using systems that the signatory can maintain under his/her sole control. This, by necessity, means that the digital signature will only be processed by a certification authority after robust security and ID checks are carried out. An advanced electronic signature will, however, require a certification authority19 to have verified the identity of the individual using same however.

For an electronic signature to become an advanced electronic signature it must be:

(i) uniquely linked to the signatory;

(ii) capable of identifying the signatory;

(iii) created using means that the signatory can maintain under their sole control; and

(iv) linked to the data to which it relates so that any subsequent change of the data is detectable.

An advanced electronic signature has more significant value than an electronic signature: it guarantees the integrity of the text, as well as the authentication. The juridical value it has is for integrity: one is sure the text received is the same that was sent, and that no hacker has changed it.

The only practical way to meet these requirements is to use the technology called Public Key Infrastructure (“PKI”). PKI is the technology that provides a solution for secure electronic signatures. The key components are the digital certificates that form part of the signature. These allow for the validity of an electronic signature and the identity of the signatory to be authenticated. The electronic signature and the digital certificate are both provided by the certification service provider. The electronic signature that incorporates the digital certificate is usually held on a chip embedded within a pin protected smart card that the signatory can maintain under their sole control or held remotely and securely by a third party.20

The authentication of a deed or a missive by a person using a digital signature operates within PKI. There are two mirror aspects of digital signatures. From the point of view of the party who holds the signature no-one else must be able to use it. However, from the point of view of the party who is to receive and rely on the document authenticated by a digital signature, there must be a method of verifying that the document has, indeed, been digitally signed. The technology is complicated as one might expect but it essentially operates on the basis of a private key and a public key. The private key is held by the holder of the digital signature and is not made known to the other party who is to receive the digitally signed document. The public key on the other hand is available to the recipient of the document and that party uses the public key to verify simply that the document in question has been authenticated by the digital signature. A PKI infrastructure employs advanced encryption techniques. It is obvious that there must be a closed, robust and secure environment in which solicitors can interact with each other and indeed, interact with the Land Register and other bodies with a view to processing electronic dealings free from any interference by any unauthorised outsiders. Referring once again to the ARTL system, the PKI created for the Land Register is a closed tactical public key infrastructure. This means that the digital certificates were/are issued to licensed ARTL users only and cannot be used for any purpose other than for the purposes of the ARTL system.

A significant step forward was made on 11 May 2014 when the Electronic Documents (Scotland) Regulations 2014 (“the 2014 Regulations”) came into force. The Regulations are a small but very important step that will help facilitate conveyancing in Scotland to be carried out electronically. The 2014 Regulations were made under powers that were inserted into the 1995 Act by the 2012 Act. The 2014 Regulations allow legal documents that the 1995 Act specifies must be in writing (other than wills and other testamentary writings at present) to take an electronic form and be legally valid.

The 2014 Regulations provide that electronic versions of legal documents governed by the 1995 Act can be legally valid if they are signed by using what is termed an “advanced electronic signature.” For a document to obtain the presumption that it is has been signed by the granter, and to become self-proving, it must be signed using an advanced electronic signature, and that signature must be certified using a “qualified certificate.”

The terms “advanced electronic signature” and “qualified certificate” used in the 2014 Regulations are defined in the Electronic Signatures Regulations 2002 (“the 2002 Regulations”), a piece of Westminster legislation that adopted into UK law Directive 1999/93EC of the European Parliament and Council on a Community framework for electronic signatures.

Advanced electronic signatures are issued by what is termed a “certification authority.” For an electronic document to become self-proving, the documents must be signed using an advanced electronic signature that is certified using a qualified certificate. The 2002 Regulations prescribe that a qualified certificate must contain:

(i) an indication that the certificate is issued as a qualified certificate;

(ii) the identification of the certification-service-provider and the State in which it is established;

(iii) the name of the signatory or a pseudonym, which shall be identified as such;

(iv) provision for a specific attribute of the signatory to be included if relevant, depending on the purpose for which the certificate is intended;

(v) signature-verification data which corresponds to signature-creation data under the control of the signatory;

(vi) an indication of the beginning and end of the period of validity of the certificate;

(vii) the identity code of the certificate;

(viii) the advanced electronic signature of the certification-service-provider issuing it;

(ix) limitations on the scope of use of the certificate, if applicable; and

(x) limits on the value of transactions for which the certificate can be used, if applicable.

The Law Society of Scotland is currently in the process of introducing an electronic practising certificate or Smartcard which will contain within it a secure digital signature that meets the requirements for an advanced electronic signature that is certified using a qualified certificate.21 These Smartcards will give Scottish solicitors the ability to benefit from the 2014 Regulations and sign legal documents electronically. This is being achieved by way of a phased roll-out which commenced in Summer 2014.

Trust is a key element of every PKI infrastructure. Under the ARTL system, the procedure for obtaining a Digital Signature began with a personal visit by Land Register staff in order to validate the identities of those people who were to act as local registration authorities in face to face meetings. A similar certification process is being undertaken by the Law Society and that is exactly as it should be in order to ensure that public confidence in the system is maintained.

As far as general practice is concerned, it might well be prudent for solicitors to incorporate authority from clients in Terms of Business to the effect that the client authorises their solicitor to sign missives and any other permitted document, electronically on his/her behalf. No such authority is given under current practice when adjusting missives, of course, but it is good practice at the moment to seek authority from one’s client before issuing an offer or formal missive. It therefore makes sense to add a simple provision to this effect in Terms of Business.

The full effects of the change to digital signatures will not be harnessed until a secure electronic document exchange facility is available. That has been talked about for some time. The reality, however, is that such document exchange facilities already exist. The stockbroking community, among others, is well versed at dealing in this way. This is a natural progression for conveyancing and the sale/purchase of heritable property generally. It is envisaged that this will be a secure online portal or platform on which solicitors can communicate in a secure manner with other solicitors, lenders, RoS, Revenue Scotland and, indeed, their clients. Once there is a single national missive and standard styles of common conveyancing documents22 there will be a greater opportunity for solicitors to focus on being a trusted adviser in the process which, in time, will hopefully see the Scottish system of conveyancing retain its uniqueness. There is, at present, a trend towards us having a conveyancing system that is, to all intents and purposes, the same as that which operates in England and Wales, with exchange of contracts and chains of transactions becoming the norm. There is an opportunity now to reverse this trend.

(3) The need for client confidence

As mentioned above, The Law Society of Scotland Smartcard initiative will not have full coverage until October 2015. Commercial solutions are believed to be available however. One such solution is the Yooseful Technology Property Manager™ product.23 This product is registered under a certification authority through Entrust.24 To become a certification authority, an organisation must seek accreditation under the T Scheme.25 T Scheme was initially established to provide a voluntary approval scheme for providers of the cryptographic elements necessary to underpin the use of digital signatures. This is because Government wishes people and organisations to have trust in e-commerce. The digital certificate can be embedded in a mobile phone or in a card and card reader as the case may be and can be used on a “pay as you go” basis. There are benefits of other “wrappers” offered by the providers of the digital signature e.g. indemnity insurance etc.

In essence, it is envisaged that the net effect will be a streamlining of the conveyancing process and thus satisfying the desire for the legal profession to remain as effective gatekeepers of sale and purchase transactions. People want to communicate electronically – and many do it already without fully appreciating the inherent risks that exist when transacting in an insecure manner. They are used to it and expect instant responses. Secure email exchange would be much better so that transactions are safe. It is therefore imperative that there are robust safeguards in place in order that the sale and purchase process can operate smoothly and hopefully help minimise delay and loss. This will be achieved by removing uncertainty with regard to undelivered or intercepted emails; missing deeds; delay in conclusion of missives etc. In what way is that not a good thing?

For the Law Society Secure Digital Signature to be used effectively in a conveyancing transaction, it will require to be integrated with a firm’s case management software and other systems. That may not be as simple a process as it sounds and discussions are underway with case management software providers with a view to smoothing integration. Perhaps there is an opportunity for the Law Society to offer a branded secure dealing room or portal to its members as a way to effectively host the platform on which secure transactions can be carried out?

Digital signatures based on digital certification provided by a certification authority allow parties to rely on the validity of the signature. In simple terms, if you trust the certification authority, then you can trust the digital signature. The digital signature will be legally valid and admissible as evidence of the authenticity and integrity of the electronic communication. It will hopefully also speed up the process of concluding missives, and remove problems encountered with regard to delivery of letters concluding the bargain etc.26

As with any change in the way things are done, it will take time for digital signatures to become the norm. Put simply, we tend to trust that which we know. I am confident that practice will evolve quickly, however – especially among the younger members of the profession. Why should we and our clients not benefit from a secure way in which to sign and exchange contracts and documents? “Early adopters” will have an opportunity to develop their practices further by embracing this exciting, and entirely logical development.

Any system, whether in ARTL or in the exchange of missives or the signing of documents in a manner designed to replicate as nearly as possible the existing paper-based systems, must be based on client confidence. For so long as members of the public do not have digital signatures of a type that meet the prescribed requirements, the essential underlying element will be the authority given by a client to his/her solicitor or other agent to sign for them using a digital signature. From a policy and security point of view, the holding of a digital signature should be with an individual rather than by a firm or limited liability partnership as a whole as the latter would render the system less secure. There are, however, already developments which might result in the use of digital signatures being extended to any transaction concluded over the internet. This involves the use of a biometric.27 A biometric solution uses physiology to reinforce the link between the person applying the digital signature and the signature itself and is, perhaps, where we will end up as further technological advances are made.

Change will happen and it is suggested that it makes logical sense for the whole sale and purchase transaction to be able to be competed electronically from start to finish. Conveyancing Case Management systems are now widely used and it is envisaged that changes to these systems will increasingly make use of the technological developments that exist, especially when, as is the case with Part 10, these are underpinned by legislation. It is essential however that all new systems are introduced with care and attention especially with regard to the importance of client confidence therein. It is this that gives the solicitor an opportunity to remain central to the sale and purchase process as a “trusted adviser.”

C. Conveyancing Future

(1) National Land and Property Information database

An essential requirement for an efficient system of transferring ownership of heritable property is the accuracy and availability of information relative to the property being sold and, indeed, neighbouring properties. It is essential that searches of local authority and other records are undertaken prior to the purchase of a property. Unfortunately, however, the quality of records and practices differ from local authority to local authority. This results in uncertainty and increases the potential for error and loss.28 There are some examples of very good practice in local authorities. One such is the City of Edinburgh’s planning and building standards portal.29 Even that system still has its gaps however e.g. plans are not available in all instances and all current systems suffer from the lack of a uniform addressing database. It is nevertheless an example of what can be achieved. The introduction of the National Gazetteer as a result of a collaboration among 32 local authorities in Scotland was a significant step forward with each property being allocated a Unique Property Reference Number (“UPRN”). There is considerable potential in grouping all relevant data from both public and private sources around the UPRN.

Up to date and readily accessible information on land and property is at the very core of the conveyancing service. It has been argued for many years that it is nonsensical for solicitors to have to have recourse to multiple data sets, some of which may not be comprehensive in their coverage or, indeed, be current. This is not in the best interests of either buyer or seller. Why should they be put at risk? It must surely be the case that in today’s information-based society that all relevant data on land and property is held in a comprehensive and easily searchable database. This initiative may well be the catalyst for reform that has been required. Without it, the existing systems would grind on with little or no appetite for change. It is suggested that the availability of relevant information which is accurate and comprehensive, can be properly interpreted and can be relied upon and is readily accessible is not only consistent with the aims of Government as far as efficiency is concerned, but is also necessary as part of the Scottish Government’s commitment to improve the supply of information for people when making a decision about buying and selling a home. The benefits of a national portal containing all information relative to land and property (other than title information) are significant and are achievable given the political will to do something about the present unsatisfactory nature surrounding the supply of information relative to land and property. Why should this be tolerated in this day and age when it can be avoided?

There have been a number of recent developments which have the potential to significantly improve the way in which information about Scotland’s land and property is managed and made available. A number of inter-related initiatives are being, or are about to be, launched, which together with new governance arrangements, suggest that the original aims of the Scottish Land Information Service (“ScotLIS”) may finally be realised.

In 2001, those involved with the ScotLIS project30 produced the following statements of intent:

The ultimate aim of the ScotLIS project is that of providing an integrated data set where the user obtains information from a range of providers by means of a single search enquiry. This will be facilitated by means of a gazetteer … The extent to which data from different suppliers will be integrated will be determined in the course of the ScotLIS pilot and through the ongoing development of the service.

ScotLIS never progressed beyond the pilot stage for a number of reasons, mainly to do with the available technology at the time, but also due to the way in which the organisations involved viewed their own information. Since then, a number of significant events have occurred including legislative change and most markedly the economic downturn which has led to serious review of the way in which the public sector will require to deliver services in future.31

In December 2009, Scottish Ministers signed the European INSPIRE Directive which places an obligation on them to publish information on a number of spatial data themes which contain environmental data. Those themes directly related to land and property are Addresses, Geographic Names, Cadastral Parcels and Buildings and the Directive explicitly specifies what information is required to be published and how this must be done using web services. This was a very important step on the road to the goal of joined-up property information.

In 2010, a joint venture was established between the Local Government Association and the Ordnance Survey to deliver a National Address Gazetteer for England and Wales by working collaboratively to combine the best features of the National Land and Property Gazetteer and Ordnance Survey address products. This provided for the inclusion of One Scotland Gazetteer data into the National Address Gazetteer.

The Scottish Government also established a Spatial Information Board with the remit to implement the Scottish Spatial Data Infrastructure/INSPIRE Directive requirements. The Board’s membership is drawn from senior officers from Scottish Government, NDPBs, SOLACE, NHS, AGI Scotland, Edina and the Registers of Scotland. The Board reports to a National Board overseeing public sector reform in Scotland. Five theme groups were established under the Board, with one of these having the remit for Land, Property and Addresses, which include Geographic Names and Buildings and there is a clear reporting structure for land and property related information to Ministerial level. This was one of the key components missing from ScotLIS in 2001, as well as the links to other geospatial initiatives.

Scotland is well placed to develop a land and property infrastructure which will be capable of supporting greatly improved services, including e-Conveyancing and improved asset management.

Unifi Scotland32 is a think tank that was established a number of years ago to look at ways of improving access to and use of data on Land and Property with a view to having a government-backed definitive source of information. Its membership includes representatives from The Law Society of Scotland, the Royal Institution of Chartered Surveyors, RoS, the Council of Mortgage Lenders, Ordinance Survey private search companies and representatives of local and national government. The focus of Unifi is to enhance the accessibility, quality and reliability of property information and, in turn facilitate the quicker completion of property transactions. In essence, Unifi seeks to improve the current system. The progressive availability of location-based information and the ability to usefully link various sources of this through definitive addressing and intelligent mapping provides the means to improve decision making, smarten traditional ways of working and draw significant value in a way that has not been possible before. Hopefully all stakeholders will be convinced of the considerable savings that will be achieved and we can move quickly towards converting this vision into a reality.

(2) Comparative example

It is usually the case that someone, somewhere will have done, or is thinking of doing, that which you are considering. Legal systems are no different. One of the attributes of Scots law over the years is the way that it has adapted and learned from other jurisdictions. That has been hugely beneficial and the study of comparative law can bring significant benefits.

One such benefit may be capable of being found in Norway where an innovative land information project has already been introduced by the Norwegian Land Information company.33 In Norway, the majority of municipalities have pooled their information on land and property with the Norwegian Land Information company, Ambita AS. This information is held digitally and is accessed on a “pay as you go” basis. Considerable benefits have accrued both for local government and for those who rely on the information. It is hoped that it might be possible for a pilot study of such a project to be undertaken in Scotland. This would require collaboration among local authorities, utility companies and the holders of other information on land and property.

The property information portal in Norway is called INFOLAND and it serves as an inter-operable cooperation between public and private sector, collecting layers of information necessary to the various stakeholders in the property segment, be they a private citizen, mortgage lenders and credit institutions, property solicitors, surveyors, contractors and others. The INFOLAND portal connects information from the planning and property departments of the municipalities in addition to information developed on the back of this from private sector search companies and other government bodies such as environmental offices, Ordnance Survey and others. The principle behind the portal is simple. A one-step search for a property in question and all information relevant to the request is made available. The supplier (the local authority or another information provider in the portal) provides the necessary information either immediately as a pdf to be downloaded or to an email address or – in the case of non-digital documents – to a specified postal address. The simplicity of the portal’s front-end function for the searcher covers a multitude of layers that also entail an administration statistic allowing the supplier to follow requested transactions. In the case of payments, a simple arrangement that allows for subscription or for credit card payments is also made available.

In short, the INFOLAND portal has functioned as a single one-stop-shop for all layers of property information in Norway since its launch in 1998 in Stavanger. It provides efficient and timesaving access to information, thereby saving money and speeding up Norwegian property transactions. It is hoped that the same result can be achieved in Scotland.

(3) Lender Exchange

Changes are also currently being made by a number of mortgage lenders with the introduction of Lender Exchange34 by Decision First Limited, a joint venture company between Decision Insight Information Group and First Title plc. Individual lenders have been communicating their positions to solicitor firms on their lending panels.

Lender Exchange is a web portal which aims to address the issue of multiple lenders seeking similar information from solicitors in order to better manage their panel systems. The aim is to reduce costs and the administrative burden on solicitor firms while also helping the mortgage lenders minimise fraud and negligence through due diligence.

Information is gathered by Decision First and a fee is paid based on the size of the firm. Once in the system, the information need not be further updated unless there is a change to individual details such as an amalgamation, a finding of professional misconduct etc. The obligation will be on the firm to advise of changes. Leading the way with Lender Exchange are Santander, Lloyds Banking Group and RBS, but the system is open to all mortgage lenders who wish to participate.

Lender Exchange is being promoted by mortgage lenders – not the Council of Mortgage Lenders.35 Lender Exchange is designed to allow lenders to communicate better with solicitors on their panels by electronic means rather than the present outdated requirement that fax be used. An added benefit might be that solicitors could also be able to communicate in a secure manner with other solicitors on the portal, thus creating a secure dealing room of the type mentioned above on which conveyancing transactions can be carried out. This would be a good example of solicitors and lenders working together, irrespective of any decision with regard to separate representation. This would be a positive step forward but it is dependent upon Lender Exchange being operated in a manner which is seen to be fair to all concerned.

(4) Law Society Working Party on the Future of Conveyancing

Following the Law Society AGM in 2013, a Working Party was established to consider various issues affecting the residential property sector. The Working Party is made up of practitioners and others with interest in the residential property sector and it has managed a full meeting each month since July 2013. Various strands worthy of investigation were identified which, taken together, should enhance the way property transactions are undertaken. These include:

(i) Standard Missives

(ii) Standardised Documentation

(iii) Secure dealing room or portal

(iv) Quality Badge for Conveyancers

The Working Party believes there is a clear role for a vital, progressive legal profession assisting consumers in the sale and purchase of residential property and that solicitors should seek to remain at the core of that process. That goal is best achieved however by the Law Society leading the change process from the front for the benefit of its members and citizens alike. In so doing, the Law Society is following the lead of countries like Denmark where solicitors made fundamental reforms to the way their role in the house buying/selling process operated following the removal by the Danish Government of the solicitors’ monopoly in conveyancing. They now have a thriving property profession and we can usefully learn lessons from their experience.

(5) The Digital Home

With registration happening automatically following completion of an electronic process, there will, in future, be no physical delivery of title deeds. Settlement will therefore become truly symbolic with the keys being the focal point – for as long, of course, as keys are still required. We will have therefore come full circle and are effectively taking sasine! A fully integrated electronic security system covering the property and operated by a personal PIN is already a reality. Who is to say how this will develop? It is conceivable that all information relative to a property could be stored in a memory chip embedded in the property itself perhaps in the form of an In Home Display. This could be a register of all repairs and improvements carried out – including all local authority and other permissions in respect of the works. This would be an up to date record and would replace the Property Questionnaire as part of the Home Report. Until that time however, the keys and supporting documentation such as consents, guarantees, permissions and others will be delivered at settlement. These are important documents and have to be kept safe and it is suggested that these should also be recorded electronically in much the same way as a car log book is maintained.

D. So How Does the Vision Become a Reality?

We are already quite far along the road towards conveyancing transactions being completed electronically. As mentioned above, there are already companies that have developed software which can be utilised to enable agents and solicitors to collaborate, share property information and digitally sign and exchange property contracts.

The 2012 Act will also further enable electronic registration of title in the registers under the management and control of the Keeper of the Registers of Scotland. Additional regulations under the 2012 Act will follow which will e-enable ARTL Mark 2 and other such developments. It is envisaged that this will be by way of a process of evolution rather than revolution however. Practitioners will be given the opportunity to get used to accessing the registers electronically and the move towards a comprehensive ARTL process will thus evolve over time. That time period is finite however. The road map to digital conversion is being prepared.

Over a period of time, the Land Register will be cleansed of real burdens that are no longer valid and subsisting. This will be achieved by solicitors informing the Keeper of their judgment in this regard. Once done, the Land Register will be transparent and fully accessible. This, of course, also fits with the stated aim of Government to have all Scotland mapped and registered in the Land Register by 2024.

It is suggested that the electronic genie is out of the bottle and we have been afforded a glimpse of the future. We have a chance to shape that future however. Is it to be one where the solicitor remains central to the process? I do not see why not. Changes in working practices and, more importantly, in attitudes, will be required however. Conveyancing is a service and we all like to receive good service. Most solicitors provide a very good service and it is suggested that it is now time to focus on how to implement these changes and re-design our businesses accordingly. The heady days of the property boom have passed. During that period, it was almost too easy to make money from buying and selling property for clients. Looking forward, we must surely focus on quality of service and the trusted adviser concept as a means to providing a better service to our clients. I suggest that the effective introduction of changed working practices will assist that goal rather than hinder it.

Once available, e-Conveyancing (in its fullest extent) will make property transactions cheaper and quicker to complete. Such a facility may not speed up the negotiation of missives which, on many occasions, for many often oblique reasons can become very lengthy. It might just act as a catalyst however and we might get back to a situation last seen in the 1970s when missives were often concluded in a short period of time and often on a de plano basis. To become a reality however, there has to be a will on the part of everyone involved in the process to embrace the necessary changes and make it happen. The fact of the matter is that clients will expect change and for transactions to be processed in the most efficient way possible. Those who do embrace change once the necessary safeguards are in place should gain a competitive advantage over their rivals.

The digital clock is ticking…

---