Arguments for scale fees shown to be groundless
Research conducted by the Administration has found that the Law Society's main argument against abolition of scale fees for conveyancing work - that price competition leads to shoddy work - is self-serving and unsubstantiated.
In a report compiled by the Legal Department, entitled "The Case Against Scale Fees for Conveyancing", it is noted that the debate on scale fees is often conducted as if scale fees were uniformly charged for conveyancing transactions.
A spokesman for the department, quoting from the report, pointed out that this is not the case.
"Many solicitors waive the fees for certain aspects of their work - they may, for example, waive the fees for the sale and purchase agreement and mortgage, and charge only the scale fee for the assignment.
"These types of waivers are permissible, even though the scale fees are, in effect, undercut. It is also understood that some solicitors improperly charge less than the scale fees for their conveyancing work," he said.
"If, as the Law Society maintains, it is essential for scale fees to be charged in order to stop a vicious price war and shoddy work, why does it tolerate these activities and why does it not discipline those who improperly undercut the scale fees?" he asked.
Among other issues covered, the report identifies eight main problems caused by scale fees:
Clients are not charged fees for conveyancing that are based on the value of the work done;
Solicitors have no incentive to be more efficient and cost-effective in order to offer competitive fees, and consumers are not able to benefit from such fees;
Fees are kept at an artificial level and do not respond to the supply of and demand for conveyancing services. Consumers cannot therefore benefit from reduced profits that would normally result from the growing number of conveyancers;