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Property Boom Increases Professional Negligence Risks

Thursday, 12 June 2014

The latest property boom has meant that property businesses of all descriptions have been inundated with work. Although London businesses such as estate agents and conveyancers have been enjoying rising house prices since 2009, other areas of the country have only experienced an acceleration in the property market more recently.

The improvement in this sector may have economists worried about a bubble but that is unlikely to quell the enthusiasm of professionals benefiting from the transactional work they are getting. There is one thing that can put a spoke in the wheels though and that is the possibility that overstretched lawyers and others start to cut corners and damage the quality of their service.

When this happens there is a risk that clients suffer and professional negligence claims rise.

Is there Evidence of Falling Service Quality?

Having struggled through the worst recession in living memory, it would be an unfortunate state of affairs if the plucky survivors in the property business shot themselves in the foot by doing a poor job.

Sadly though there is evidence to show that his is happening on a significant scale.

Around one in five complains about lawyers made to the Legal Ombudsman relate to residential conveyancing. Homeowners are inundating the Legal Ombudsman with complaints relating to ‘sloppy legal work’ which has led to delays, poor quality advice and, most worryingly of all, buyers receiving letters from HMRC demanding unpaid stamp duty.

The rise in the numbers of complaints has been dramatic in the last year with an increase from 1,189 in 2012/13 to 1,476 in 2013/14. That represents an increase of around 24 per cent in a year. The Legal Ombudsman has helped clients recover nearly £800,000 over the same period.

London and the South East were the worst areas in England and Wales for complaints overall suggesting that there is a link between the boom in the market and falling service levels.

It should be noted that this still represents a small percentage of the overall number of property transactions taking place each year.

Bad Legal Service a Serious Issue for Clients

The Chief Legal Ombudsman Adam Sampson suggested that problems were arising from poor procedural processes in firms and, in some cases, outright fraud. In either of these circumstances clients of professional service firms should not lose out if something goes wrong.

Although the Legal Ombudsman can help those who have suffered from poor service; if bad service or professional negligence has caused serious loss then it important that clients seek independent legal advice as soon as possible.

For specialist advice contact Peter Gourri today by email or telephone 0207 611 4848.

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