What is the Law in your Life?

5 things you need to know about trade marks:

1.    You are afforded protection even if you have not registered your trade mark – use the ™ legend to show you know your rights!  You cannot use the ® legend unless you have a registered trade mark.

2.    Registration provides you with immediate and robust protection against anyone copying your brand, it becomes an asset of your business.

3.    You should always carry out thorough due diligence when starting a new company or brand to make sure no one else is using that brand. Brymer Legal can help you do that.

4.    You are not guaranteed the use of a particular company name even if you own the trade mark.  Nothing directly links Companies House to the IPO. Be careful not to lose the company name you want.

5.    Registration in the UK is governed in the UK by the IPO (link), in the EU by the OHIM (link) and worldwide by the WIPO (link).

LawCloud/LawWare Annual Conference

Stewart Brymer gave a talk today at the LawWare/Cloud Annual Conference on what may lie ahead in 2014 for residential property lawyers. His message was that there should be opportunities for forward-thinking firms, no matter their size. Delegates were recommended to look at their businesses and think about how they might best use technology to their advantage. The core message was to focus on their clients and the service they give. Only by doing this will they be able to withstand some of the commercial pressures that are building.

During the presentation reference was made to the Law Society's review of the residential property process and matters such as a National Missive; a virtual deal room or platform on which transactions would be facilitated were discussed. Mention was also made of the proposed electronic practising certificate which will include a suitably robust digital signature to exacting EU standards. This will fit with the coming into force of Part 10 of The Land Registration Etc. (Scotland) Act 2012 which will amend the Requirements  of Writing legislation to permit the use of digital signatures as equivalent to a traditional "wet" signature. 

These and other changes were seen as positive developments which require to be embraced - if only to decide that the changes are not for your firm. The Law Society is looking to inform the profession and that process is under way. In the end  of the day, it is for each individual solicitor or firm to decide what is best for them.

Law Society AGM – Perth 31 May 2012

At the AGM there was a report on the decision of the Law Society Council to carry out a review of the Conflict of Interest Rules. This followed a motion at the 2011 AGM that the exceptions to the general prohibition on acting for different parties in conveyancing transactions be reviewed.

It was noted that the Professional Practice Committee had received a remit to set up a Working Party to carry out a review. A number of solicitors attended a Focus Group meeting in Edinburgh in August 2011 and the Working Party concluded that the existing Rule should not be changed. It was also felt that any change would result in delay to conveyancing transactions and increased costs to consumers. This view was endorsed by the Professional Practice Committee at its meeting in September 2011.

Since that date, there have been a number of other developments in relation to lenders. These revolved around reductions in Panels. Examples include Lloyds Banking Group, Nationwide and, most recently, HSBC.  Nevertheless, the view of the Professional Practice Committee remained the same. This view was put to the floor by the Convenor, Graham Mathews.

Members were informed that the Society’s Property Law Committee took a different view and a paper had been circulated. The paper was spoken to by the Convenor, Ross Mackay. There then followed discussion among members. It was pointed out that there was a groundswell of opinion in the profession  that the time was right to consider making a change and that the issue was not solely concerned with mortgage fraud.

The Meeting was advised that the matter had been debated at Council and that it had been agreed that they were minded to propose amending the Rules to prohibit the same firm acting for lenders and borrowers in all transactions (residential and commercial). To that end, a Working Party is to be established to engage with members of the Society and with lenders and other interested parties so as to promulgate standardised practice and procedures for security work. The Working Party is to report to the Special General Meeting in September 2012 with recommendations.

Professor Stewart Brymer WS

31 May 2012

Joined-Up Land and Property Information: Will the Dream Come True at Last?

Background

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 project (http://www.scotlis.com) 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. For a more detailed review of the background to ScotLIS, see an article by the authors in Greens PLB Issue 97 pp1-3.

Recent Developments

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.  There are now plans to include Scottish data into the National Address Gazetteer and John Swinney, the Cabinet Secretary for Finance and Sustainable Growth has given his approval to seek closer integration between the One Scotland Gazetteer and National Address Gazetteer, whilst retaining a Scottish identity.  It was announced on 18 July 2011 that the National Address Gazetteer would be handled by the soon to be created Public Data Corporation.

The One Scotland, One Geography strategy for Scotland is due to be renewed in 2011 with the working title of “One Scotland: One Europe: One Geospatial” which reflects the current aspirations to consider Scotland in a more European context. This demonstrates the broad consensus that exists across Europe to deliver a unified picture of land and property information. A number of interested parties are being consulted on the content of the strategy and Scottish Government will have the responsibility for publishing it in due course.

The Scottish Government recently announced the establishment of a Spatial Information Board with the remit to implement the Scottish Spatial Data Infrastructure / INSPIRE Directive requirements. The Board’s membership will be drawn from senior officers from Scottish Government, NDPBs, SOLACE, NHS, AGI Scotland, Edina and the Registers of Scotland and it is chaired by Jim Mackinnon, Director and Chief Planner, Scottish Government.  The Board is expected to report to a National Board overseeing public sector reform in Scotland.  Five theme groups have also been established under the Board, with one of these having the remit for Land, Property and Addresses, which include Geographic Names and Buildings.  Once the governance structure is established and functioning it should provide 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 spatial initiatives.

Assuming that the above all materialise as anticipated, Scotland should be well placed to develop a land and property infrastructure which will be capable of supporting greatly improved services, including eConveyancing and improved asset management.  

What does this mean for Conveyancing practice?

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 is 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 unclear where the role of the private sector lies in this. Perhaps there might be a case for a form of public/private partnership? This would bring together the pioneering work undertaken to date by the public sector with a number of comprehensive datasets that exist in the private sector. Unifi Scotland (http://unifiscotland.com) 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. Anyone who is interested in contributing to that debate should contact the Chair through the website.

The views expressed in this article are those of the authors and do not represent the views of their respective organisations or of the Scottish Government.

An Article by Professor Stewart Brymer WS, Brymer Legal Limited and Iain McKay, Improvement Service    

Published in Greens PLB (October 2011)

The Demise of the Letter of Obligation?

Introduction

Delivery of a disposition  in exchange for payment of the price in a conveyancing transaction does not, of itself, confer a real right. Only registration does that. See Sharp v Thomson 1997 SC (HL) 66 and Burnett’s Trustee v Grainger 2004 SC (HL) 19. Accordingly, the so-called “race to the register” dictates that the first person to acquire a real right by way of registration prevails. See also Ceres School Board v   McFarlane (1895)23 R 279.

There is, however, an attendant risk caused by the brief delay between delivery of the deed and its registration. This has come to be known as “gap risk”. That risk can be divided into (a) the risk that the granter is sequestrated, put into liquidation etc.; and (b) a risk that the granter grants a competing deed to another party and that deed is registered first. In addition, there is also a short gap between the date of the search in the registers on which the grantee relies and the actual date of settlement. This gap has been reduced considerably in recent years and, if using ARTL, (www.ros.gov.uk/artl)  the gap is virtually removed altogether. Nevertheless, the gap still exists. As stated in para 14.2 of the Report of the Scottish Law Commission  Number 222 on Land Registration  (www.scotlawcom.gov.uk/publications/reports), “Efficient conveyancing can cut down these two gap elements but experience shows that it is hardly possible to eliminate the problem altogether.”

As mentioned above, the introduction of ARTL  along with the effect of Section 17 of the Bankruptcy and Diligence (Scotland) Act 2007 have also helped reduce the gap risk but they do not provide a complete solution.

The gap risk has traditionally been covered by the seller’s solicitor granting a letter of obligation which, if in “classic” form constitutes a personal guarantee by the granter’s solicitor. In recent years, solicitors have, quite rightly, questioned why they should provide such a guarantee to make the conveyancing system operate more efficiently. As Professor Rennie has said, the letter of obligation is effectively the oil that lubricates the system and enables it to work. 

In England and Wales, it is possible to obtain an “official search with priority” which provides a period of 30 business days (a period equal to 42 days). Under that system, the use of advance notices is optional but they are widely accepted as part of the conveyancing process as they afford a degree of protection to purchasers. A registered advance notice involves a notice being placed on the Register stating that the owner (A) is intending to grant a deed to a third party (B). This notice does not confer a real right on B. What it means is that if a deed is, in due course, granted to B and that deed is registered, then anything in the Land Register in favour of another party (C)  that is registered between the date of the advance notice and the deed of the registration of the deed in favour of B is postponed to the said deed in favour of B – the advance notice being capable of being seen on a search of the Register carried out by a prospective purchaser.

Proposed Reform

A recommendation for reform to the Scottish system to deal with problems associated with floating charges was suggested a number of years ago. See Greens PLB Issue 45 at pp 1-3. In response to calls for reform of the system generally  from The Law Society of Scotland amongst others, the Scottish Law Commission carried out an investigation into possible reform. This involved a consideration of the systems of advance notices used in England and Wales and in Germany. See Scottish Law Commission Discussion Paper 130 and the aforementioned Report on Land Registration.

A brief outline of the proposed reforms is as follows:

1.     An advance notice may be registered whether or not there are antecedent missives.

2.     It is recommended that the advance notice system will apply only to properties registered in the Land Register. Scottish Ministers will, however, have power to extend it to first registration.

3.     The draft Bill which forms part of the Scottish Law Commission Report does not specify the form of an advance notice which, in practice, is likely to be electronic. It will be possible to lodge the notice in paper however. It is expected that the exact form of the notice will be regulated by rules to be promulgated by Scottish Ministers.

4.     An advance notice would normally be granted by the party named as proprietor in the title sheet but third parties, who are not heritable proprietors but who can validly grant the deed in question, may also register an advance notice. It is also recommended that the notice can be granted by any other person, so long as the notice bears the consent of the person who could validly grant the deed in question. This accords with the German approach. In a standard conveyancing transaction, the missives will require to provide for an advance notice to be applied for.

5.     Advance notices will enter the Application Record in the Land Register and would not be registered in the title sheet. Unlike at present, the Application Record will be one of the four recognised parts of the Land Register if the recommendations of the Scottish Law Commission are followed. See SLC Report paras 4.9 and 4.35.

6.     The Scottish law Commission recommended that the advance notice would subsist for a period of 5 weeks (35 days) – not “business” days. The Bill envisages that the period can be varied by secondary legislation.

7.     It is recommended that the protection afforded by advance notices should extend to entries in the Register of Inhibitions that appear within the protected period.

Conclusion

In broad terms, an advance notice would cover the risks covered by a typical letter of obligation. It is not envisaged that it would protect against a notice of potential liability for costs and other possible exceptions as may be listed by Scottish Ministers.

It is suggested that the introduction of advance notices in Scotland is long overdue. The Scottish Law Commission are to be congratulated for carrying out an in-depth investigation of the background to the current system and of the options available for reform as part of their research into the reform of the land registration system. Under the proposed system, there would still be a “race to the register”. Under that system the first person to register would prevail “but with the possibility of the result being changed if that registration happened during the currency of a notice in favour of another person” – SLC Report para 14.49.

Conveyancing practice would obviously require to change. The prospective grantee will require to ensure that the advance notice is entered on the Register a reasonable time before the intended settlement date. Then immediately prior to settlement, the Register can be checked to confirm the entry of the notice, to confirm that no competing deed has been registered (as now) and to confirm that no potentially competing advance notice has been entered.

The Scottish Law Commission envisage that the new system will be relatively straightforward to operate and that it will be of considerable benefit both to the legal profession and to members of the public alike. Assuming a clear search, the transaction can be settled and the deed in favour of the grantee registered without fear of challenge. In a normal conveyancing transaction, it is envisaged that there would potentially be two advance notices – one in respect of the Disposition and the other in respect of any Standard Security.  This is seen as being a low cost solution to the potential harm caused by the gap risk – especially where the letter of obligation, for whatever reason, does not provide an assurance. 

It will be interesting to see whether or not letters of obligation will become redundant. It is hoped that they are no longer required. They have served their purpose and should be laid to rest – or as could otherwise be said: “Their time has came and went”!

An Article by Professor Stewart Brymer WS, Brymer Legal Limited.

Published in Greens PLB (August 2011)

What do clients want from the conveyancing process?

Introduction

Conveyancing has long been viewed by many as something of a “black art” or secret process carried out only by the “initiate and their acolyte”. That is largely the result of the language and terminology used by conveyancers and those in the residential property business. The conveyancing process is essentially straightforward however, insofar as it involves the transfer of title to a heritable property from A to B free of any real burdens or other restrictions that might render the title unmarketable.

What do clients want?

In no particular order, it is suggested that clients want:

•      a job well done, on time and for a fair fee;

•      to know that they have someone who is on their side;

•      someone who will guide them through the process; and

•      to whom they can speak to and ask for advice as and when required.

From past experience, clients want their solicitor to communicate with them regularly and to keep them updated on progress. In many respects, the solicitor’s role is to translate the legal language that they are accustomed to into language that their client understands. Having a constant contact is also very important so that clients do not feel that they are being passed from pillar to post at a time of high anxiety for them.

Some have often cynically said that all that clients really want are the keys to the property. That may often appear to be the case but it is, with respect, a gross simplification of the role of the conveyancer as well as being quite condescending to the buyer.

How are these objectives achieved?

There are, unfortunately, many examples of how not to provide a good service to clients. The biggest source of complaints against the profession and of claims on indemnity insurance generally is currently as a result of poor conveyancing. The “stack them high and sell cheap” approach may work in conveyancing if appropriate systems and safeguards have been built into the process. There are, however, more examples of such approaches that do not work rather than those that do. That is not to say that it is not possible to create a system that minimises risk to the consumer and yet keep costs down. Case management systems continue to become more refined. 

Any good conveyancing system will use a number of different approaches including Client Guides / Information Sheets and, indeed, web-based services such as podcasts. It is good to see examples of innovation designed to keep the client suitably well-informed. This can be done in a tailored manner to suit the needs of a particular client.

A substantial part of the conveyancing process is relatively standard and is therefore capable of being commoditised so that properly trained staff can undertake much of the work. Immediately a problem arises however, it is essential that the matter is referred for specialist input. This could be where the title defect is discovered or where the title or how it has been assembled is simply complex or is being transferred for a high value. Such transactions can often require more in-depth attention.

It should not simply be high value or complex transactions that merit a personal service however. That should be the objective for every client. It is suggested that the essence of a successful conveyancing business is its ability to provide a seamless, personal service to all its clients be they large or small, seller or purchaser, and irrespective of the value of the transaction. This is easy to say but how is this objective best achieved? The answer is in the use of good systems and comprehensive training – including training and communication skills and client care for all those involved in the conveyancing process – not just reception and estate agency staff. Buying or selling a dwelling house can be a very stressful time and the good conveyancer will seek to minimise and certainly not add to this by increasing stress levels. In my opinion, it is essential for a personal link and a bond of trust to be formed between solicitor and client so that important matters such as missives; real burdens; servitudes and the conveyancing process generally can be communicated properly. Terms of Business only take matters so far. They are an essential requirement in any transaction and act for the benefit of both the client and the solicitor. It could be said however that Terms of Business are more for the benefit of the solicitor as there is, after all, rarely any consultation with or revisal to such documents. 

It is suggested that opportunities exist for solicitors to differentiate themselves from competition by being better at selling their services and explaining why it is often worthwhile paying a little more for a better quality service. The importance of face to face meetings rather than dealing with a call centre cannot be under-estimated. Clients often want emotional support throughout the course of a transaction – handholding can be a big part of the job and an element that you never know when a fee is quoted. Why not make that a unique selling point?

What does this mean for the future?

I believe that there is a future for a well-structured personal service in residential property conveyancing. Such a service can often be found, but not exclusively, in higher value transactions where the client expects a more “hands-on” service. There is no reason why such a service should be the exclusive domain of such transactions however. Clients can often make choices based on price. This is not the only consideration however and solicitors need to examine their service and sell that better. It is a service that is being sold after all. 

The effective use of technology and much improved methods of communication allow for a much better standard of service to be provided across the board – even in so-called volume conveyancing businesses. There is a perception that volume conveyancing service providers offer a lesser service. While there are examples of poor service, is that really the exclusive domain of those service providers and is it really fair to describe such providers in this way? One way for volume business to operate more efficiently is for it be run on a panel system with conveyancing firms selected after a rigorous application system. Member firms would then undergo common training and then agree to meet the standard laid down in a Service Level Agreement. Such a model could be operated under the umbrella of the Scottish Solicitors’ Property Centres’ portal. The SPCs already have a common brand and the perception of quality in the marketplace. That can be built upon given the recent announcement by the SPCs of closer collaboration and is a positive development. Some would say that it has been a long time coming.

Conclusion

In my opinion, the best way to answer the question posed in the heading to this article is to put yourself in the shoes of the client. What would you want? I suggest that it would be someone to speak to; someone who will return your calls; provide updates unprompted and who is prepared to use technology to its and your best advantage e.g. scan and email documents for signature if required. In short, someone who makes the transaction smooth and who takes some of the pressure away from you during what can be a very stressful time. As Simon Greig said in a recent article (November 2011) in Back to Basics for Lawyers (a monthly business management briefing written for partners of law firms): “Know your Client and make sure your Client knows you”.

It is often said that there is little client loyalty these days. This is regularly blamed on difficult economic times and the growth of consumerism. While I understand this point of view I can only say that in my own experience, both directly and indirectly over the years, this is not the case. The most successful solicitors are those who communicate with their clients in an open and informative manner. Clients remember that and tend to go where they feel they are being looked after.

There have been major developments in technology over the past 30 years or so. We can only guess what the future may bring. Of one thing we can be sure however and that is that change will happen. There surely cannot be a better time to review working methods and processes with a view to ensuring that your business is the best that it can be – for both you and your clients.

An article by Professor Stewart Brymer WS, Brymer Legal Limited.

Published in Greens PLB (January 2012)

Real Burdens and Planning Law

Prior to the coming into force of the Title Conditions (Scotland) Act 2003 (“the 2003 Act”) on 28 November 2004, there was little authority on the subject of interest to enforce and a tendency to consider such matters in accordance with the praedial rule. While the praedial rule looks in the abstract at whether a burden is for the benefit of an identified property and at the nature of the obligation, the rule on interest to enforce relates to whether an individual with ownership of a specific property can enforce in respect of a specific contravention of a real burden. The general rule on interest to enforce can now be found in Section 8 (3) of the 2003 Act. It is provided in Section 8 (3) that interest to enforce will exist if “in the circumstances of any case, failure to comply with the real burden is resulting in, or will result in, material detriment to the value or enjoyment of the person’s ownership of, or right in, the benefited property.”


As anticipated by a number of commentators on the provisions of the 2003 Act, the interpretation of the phrase “material detriment” has provoked debate both in the Courts and in the Lands Tribunal for Scotland. See, most recently the article entitled “Real burdens revived” and the cases referred to therein in the November 2011 Issue of the Journal of the Law Society of Scotland.  The most recent case is Kettlewell v Turning Point Scotland 2011 SLT (Sh Ct) 143 which has been described as having redressed the balance somewhat from what some described as the extreme position in the case of Barker v Lewis 2207 SLT (Sh Ct) 48; and 2008 SLT (Sh Ct) 17.


In Kettlwell, the pursuers were a group of proprietors of 20 dwelling houses in a  quiet cul-de-sac in a residential housing estate. A common scheme of real burdens was imposed in the title to the development so as to seek to protect the residential quality of the development. The common scheme included a burden to the effect that each dwelling house was only to be used as a “private dwelling house for occupation by one family only and for no other purpose whatsoever.” Turning Point Scotland, a charity working to prevent social exclusion and to provide care in the community, acquired one of the dwelling houses with a view to obtaining planning permission in respect of its conversion into a care home for up to six unrelated individuals. The pursuers on becoming aware of this proposal decided to try to prevent Turning Point Scotland from changing the use of the dwelling house on the basis that their plans were in breach of the real burden restricting use to that of a private dwelling house for one family only.


The first point to be examined by the Court was whether or not the pursuers had a title to enforce.  It was accepted that a valid title to enforce did exist by virtue of inter alia the existence of the common scheme of real burdens. That then meant that the issue of whether or not they had an interest to enforce required to be examined and, in particular, whether the failure to comply with the real burden would result in material detriment to the value or enjoyment of the pursuers’ ownership of the benefited properties. This was, as it was always intended to be, a factual question which depended on the particular circumstances of the case. In Kettlewell, the Court considered whether material detriment could be shown either in relation to (a) value or (b) enjoyment of the pursuers’ properties.


Detriment to the enjoyment of the neighbouring properties was considered under three heads: (a) behaviour of the residents of Turning Point’s dwelling house; (b) increased traffic around the house; and (c) parking difficulties. Of the three heads and on the particular facts of this case, greater weight was given to parking and traffic issues.  In addition, as one would expect , the issue of material detriment to the value of the pursuers’ property was addressed through evidence provided by valuation surveyors. Comparable evidence demonstrated that an average diminution in value of 10% per dwelling house could be expected. The Court held that such a reduction in value was significant and found in favour of the pursuers.


It was always accepted that the provisions of the 2003 Act would require to be developed as a result of decided case law. Kettlewell is the latest case to help conveyancers establish some precedents as to what may and may not be deemed to be an acceptable level of interest to enforce. As stated above however, each case must be considered in light of its own facts and circumstances and questions of materiality must be assessed against the whole factual matrix of each particular case. When considering the purchase of a property by a third party or the development of a  property by the owner for a purpose other than that which is permitted in terms of that property’s title deeds it is important to recognise that questions of title and interest to enforce remain  significant issues to consider in addition to making an application to the local authority for planning permission for change of use. Indeed, it has always been thus.  As well as the consent of the Planning Authority, it may also be necessary to obtain formal waivers from benefited proprietors in order to restrict or remove the offending real burden. That, in turn, of course, leads to a consideration of who qualifies as a benefited proprietor and that is a question for another day.




Article by Scott Brymer, Solicitor, Brymer Legal Limited, Edinburgh
Published in Scottish Planning & Environmental Law - Issue 149 - Feb 2012