'What's the fuss about?' asks dual-rep advocate

'What's the fuss about?' asks dual-rep advocate


Legal processes in bridging cases have long grabbed headlines with the latest topic of controversy surrounding dual representation, whereby the same firm is instructed to work on behalf of the borrower and lender.

Eddie Goldsmith of law firm Goldsmith Williams - dual representation pioneer and high profile advocate – has been working closely with bridging lender Precise Mortgages to provide this service to the lender’s bridging clients and following the successful completion of numerous dual representation cases, Eddie asks its critics – what’s all the fuss about?

Having felt a little like Daniel in the lion’s den at the recent Bridging Power House as seemingly the sole legal advocate of joint legal representation I am pleased to say that I am still alive, still doing joint representation cases and still an advocate of it.

Having reviewed the first batch of cases which my firm accepted on a joint representation basis I am comforted that this is a good option for clients – saving them money and, importantly, time.

Of course some lessons have been learnt since we first introduced it but what is clear from our first review is that there is a lot of mystique around legal services in bridging - absolutely appropriate considering where the market has come from. However, it is also clear that just because the legals have always been done in a certain way it doesn’t mean that there can be no innovative approaches to it.

I suppose that being an outsider to the industry has helped me shape my view of bridging legals. My firms’ expertise is from the mainstream world where joint representation is the norm. Over its 28 years of practice, my firm has completed thousands and thousands of remortgage and conveyancing cases and we have always been used to dealing with both clients; the lender and the borrower. We have always treated them as two distinctly different clients albeit with a common aim. 

Bridging legals are no different but the very nature of short term lending has to be taken into account. Therefore, before we agreed to offer joint representation with Precise Mortgages we were very careful to review the peculiarities of bridging finance legals and ensure we put systems in place to deal with the associated risks.

Right from the start we were aware that we needed to work with a professional risk adverse lender who had sophisticated systems in place and who understood that they needed a legal partner as part of their team - Precise fitted this bill. Before we launched our joint representation proposition with Precise we went and saw them to go through their fraud prevention and ID measures to ensure we could dovetail our own processes with them. That visit has paid dividends.

We also wanted to make sure that we were both going to take the same view on which cases were appropriate for joint representation. We were reassured that they would take (and have taken) a robust view about which cases are not appropriate.

The fact that only one in five of our remortgage cases are suitable for joint representation is a testimony to the approach Precise are taking - with the figures for conveyancing much less, at around one in ten.

These figures demonstrate that Precise understand that joint representation cases are not the norm and that they need to be convinced of the appropriateness first before they instruct us. That is team work, not just in principle but in practice.

So, what about the cases that both Precise and Goldsmith Williams have accepted on a joint representation basis?

All the remortgage cases have involved the borrowers remortgaging their own domestic properties for a variety of reasons but all for ‘proper’ bridging purposes - from property renovation through to raising deposits for a new purchase. 

All the loans have been fixed for an initial short term of between eight and 12 months. Each applicant has a definitive exit strategy, ranging from the sale of a property through to having alternative funding in place to take out the bridge.

As far as risk management is concerned all borrowers have confirmed to us that they are aware of the risks of not complying with the bridging terms, that they are aware of the consequences if the loan is not repaid and in no circumstances have they felt they have pressurised into using the joint representation service. For our own security all borrowers have not only signed to confirm this but we have recorded telephone conversations confirming all these points.

All lawyers are concerned, and rightly so, that we not only do the right thing by clients but we evidence that fact. Unfortunately it is not enough anymore to just say we have done it. Our systems and our team work with Precise provide me with the comfort that no borrower has any reason or opportunity to claim after the event that they did not realise what the consequences of taking out a bridging loan was.

For our part we will be happy to continue working on joint representation cases with lenders such as Precise. It is a good deal for the clients and it can offer a much better customer journey.

So, what’s all the fuss about?

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