Internet Newsletter for Lawyers
According to the Land Registry, the aim of e-conveyancing is to "utilise advances in technology by creating a system that reduces the delay and anxiety which can be experienced in the house buying process". Certainly people seem to think that e-conveyancing will radically improve the conveyancing experience. An example of how pervasive this belief has become can be seen on the PSA Property Forum (www.psa.co.uk) website where the impending introduction of e-conveyancing is advanced in debate as a reason why another proposed reform, the Home Information Pack (HIP), should be abandoned.
"HIPs are totally unnecessary due to the advent of e-conveyancing and the National Land Information Service. E-conveyancing is being rapidly introduced and all communications and exchanges of documentation between practitioners, lenders, the Land Registry etc, will be undertaken electronically."
Is this widespread belief that the results of e-conveyancing will be wonderful actually correct? A sceptic might point out that the advantages of new technology are often exaggerated by technophiles. However non-experts are often reluctant to challenge technological boosterism for fear of appearing foolish and it difficult to avoid the conclusion that there has often been a lack of critical thinking about e-conveyancing.
The plan was to introduce a working e-conveyancing system based in England and Wales by 2006 although recently this has changed to "2006 to 2008". However the Government has a poor record when it comes to large-scale IT deployments. It should not be automatically assumed that the e-conveyancing project will be taken through to a successful conclusion on time or at all. Nevertheless the Land Registry can point to the successful introduction of forms of e-conveyancing in New Zealand and Ontario (albeit rather less complicated that is being envisaged here) as evidence that it should be possible to introduce a working form of e-conveyancing - even though the technological obstacles involved are formidable.
Unfortunately it is not possible at present to estimate with any accuracy what e-conveyancing will cost. The Land Registry is not able to give an estimate for the capital cost of developing the system. The costs to the users are also uncertain but the expense involved in supporting a very complex IT system which also requires banking-like levels of security is likely to be substantial. Whether here or abroad, e-conveyancing systems are expected to pay their own way. When the idea was first mooted, the suggestion was that e-conveyancing would be cheaper than the existing system. Such claims are now rarely heard and it seems unlikely that the new system will be cheaper for the ordinary consumer. Quite possibly it will be more expensive.
So what does e-conveyancing involve? There is no agreed definition but there are five elements suggested by the Land Registry which offer as good a framework as any. By examining each of these in turn we can see how likely e-conveyancing is to be successful.
Even worse, as paper is not a significant cause of the problems involved in buying and selling houses, replacing paper documents with their digital equivalents is not a solution to those problems.
Digital documents also create new problems. The entire system is dependant on the core technology of digital signatures. Whilst they have many advantages, most notably that they cannot be forged, an absolute necessity for e-conveyancing, they also have a number of drawbacks. Hitherto they have been a commercial failure. Their complexity means that they are costly to use and for conveyancers there are problems of risk and liability allocation. In e-conveyancing, digital signature systems are used within the framework of contractual agreements between conveyancers and the land registration authority. The system relies on the security of the private key used to generate the signature. Thus the entire risk shifts to the user (conveyancer) who has to protect the private key. Critics of digital signature systems have long argued that in reality this is not practical unless enormous resources are devoted to security. Even worse, as digital signatures will only belong to conveyancers, homeowners will have to sign a paper authorisation allowing their conveyancer to sign on their behalf. This is what has happened in New Zealand and Ontario where e-conveyancing has already been introduced. There may perhaps be a way to avoid this by using stylus and special pads but this means even more expense and complexity.
However e-conveyancing does remove the registration gap and allow real-time updating of the register without the need for manual re-keying of data. Indeed the New Zealand and Ontario examples suggest that this is the most obvious result of e-conveyancing. For the Land Registry this is a significant advantage. This serves as a reminder of the obvious, but often ignored, fact that the different bodies and individuals involved in the conveyancing system have different priorities.
Raymond Perry is a Partner at Davies and Partners, Gloucester and a writer on issues involving the law and IT. Email email@example.com. A collection of his papers and articles is available at www.raymondperry.co.uk.
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