Monitoring of Legal Services – Property, Construction and Planning – Property Finance and Property Leasing

The Scottish Legal Aid Board (SLAB) was given a role in monitoring the availability and accessibility of legal services in the Legal Services (Scotland) Act 2010. Our role is to ascertain whether people or organisations are experiencing systemic problems getting the help they need from solicitors, whether paid for by legal aid or on a private basis.

This paper sets out data collected in relation to non-contentious property finance and leasing issues, and SLAB’s initial assessments for the purposes of its monitoring duty.

Feedback will help us to develop our overall understanding of possible problems with access to solicitors for these issues.

Overall context for property finance and leasing in Scotland

As a commercial area of law, this paper examines legal services for corporate persons/legal persons only. Property finance is a vital aspect of any commercial property transactions, and legal services may be required to navigate the complexities of related law.

A solicitor’s services may be required for a number of areas, including for complex work concerning (amongst other aspects) certificate of title; acquisition and investment finance; and the execution and registration of security documents.

Commercial property transactions make up around 10% of all property transactions in Scotland. Whilst the volume of sales remains significantly lower than the pre-downturn peak in 2006-7, volumes and values of transactions in this area are rising, suggesting a strong recovery.[1]

Registers of Scotland data shows that this recovery has been particularly strong in the area of commercial leasing, as ‘the last financial year 2013-14 showed the highest volume of leases over the last 10 years, totalling 1,353. This is an 89% increase on the volumes during 2004-5.’[2] In terms of property finance, Cushman and Wakefield’s May 2015 Quarterly Marketbeat publication noted positively that UK-wide, ‘the availability of debt finance is at post-crisis highs’ accompanied by high levels of competition.[3] There appears to be a general positive outlook in the commercial property market in particular, with the property finance market going ‘from strength to strength.’[4]

As with the conveyancing sector, it could be suggested that this recovery is (in part) facilitated by the availability of legal services in these areas.

Role of Solicitors

For businesses and other legal persons seeking legal services in these areas, we assume that a robust private market for legal services exists: services in theses areas are funded on an exclusively private basis. Provision in this area may potentially be characterised by large firms, with regional, national, or even international reach, particularly for the largest developments.

A search of the Law Society’s ‘Find a Solicitor’ tool, returns nearly 800 solicitors specialising in ‘Commercial Property.’[5] Given the privately-funded nature of this market, we do not anticipate that there is a lack of specialist solicitors available in this area.

Geographic Coverage

We are not aware of any data which suggests the existence of a systemic access problem in terms of urban/rural classification. The Registers of Scotland 10 year report notes that in terms of the increase seen in total commercial sales between 2012-13 and 2013-14, Edinburgh, Aberdeen and Glasgow made up over 75% of the total.[6] We might expect a concentration of commercial property activity (including the relevant finance and leasing aspects) in Scotland’s cities, and as such, we do not assume that this figure reflects a geographic access problem.

Reports of problems with access to solicitors or advocates

We have no data available to us, nor reports made to us, which suggest that there are systemic problems with the availability and accessibility of legal services in this area, in general terms. We have not been made aware of any specific instances of problems in this area.

Overall summary of the availability and accessibility of legal services

For businesses and other legal persons seeking legal advice on property finance and leasing, we assume that there is a robust private market in place, characterised by firms with regional or national reach. From the evidence available, our initial conclusion for this area of law is that there is not a systemic problem with access to solicitor services, caused by issues with availability.

Probability that a systemic access problem is occurring / Reports of actual instances of problems with access / Exposure
[Probability x Reports]
1 (low) –
5 (high) / 1 (no reports) –
5 (consistently reported systemic access problems) / 1–4 Green
5-14 Amber
15-25 Red
Property finance and leasing / 1 / 1 / 1

Questions

  • Do you have any additional data which you would be willing to share with us regarding this area, or are there any other sources of data we should examine?
  • Are you ware of any specific instances where someone has not been able to find a solicitor willing to act for them in the areas of property finance or leasing?
  • Do you have any comments on the size and geographic reach of the firms involved in these areas? Are there a few large (potentially international) firms involved, covering the whole of Scotland, or is there provision at a regional or local level?
  • In terms of the number of firms involved, do you have any comments on the levels of competition in this market?
  • Do you have any suggestions for additional organisations which we may wish to consult with?

Consultees

  • Finance and Leasing Association
  • Royal Institute of Chartered Surveyors
  • Registers of Scotland
  • Scottish Property Federation

The Scottish Legal Aid Board 1

[1] Registers of Scotland, 2014, 10-Year Report 2004-2014, p10.

[2] Registers of Scotland, 2014, 10-Year Report 2004-2014, p10.

[3] Cushman and Wakefield Research, May 2015, Quarterly Marketbeat, p2.

[4] Cushman and Wakefield Research, May 2015, Quarterly Marketbeatp6

[5] See

[6] Registers of Scotland, 2014, 10 year Report: 2004-2014, p16