Lawyers and Conveyancers in Display of Unity Over Concerns About NECS

The views of industry stakeholders were openly aired at a National Electronic Conveyancing System (NECS) consultation forum held in the Sydney CBD on 18 March 2010.
 
Peter Rosier (a private practice solicitor and member of the property law committee of the Law Society of NSW) stated that the electronic conveyancing system should closely mirror the paper environment to help make the transition as smooth as possible. He said that the legal profession will not want anything to do with a NECS unless it was easy to use. A take-up by the profession of the new system will also depend on whether there are benefits to it beyond economics.
 
Mr Rosier voiced strong criticism about the major banks in relation to the difficulties of dealing with them in conveyancing matters. The bankers at the forum maintained their composure through to the end of Mr Rosier's point, which was that a significant benefit of an electronic system could be to alleviate these problems.
 
Dale Turner, of the Australian Institute of Conveyancers (AIC), stated that the Institute supported the idea of a NECS. In a display of unity between the two professional bodies, Mr Turner expressed his agreement with the comments made by Peter Rosier. He also elaborated on the difficulties that his members were experiencing with the banks.
 
In a private conversation, an attendee (not from the banking industry) told Legal Practice Intelligence that the banks were driving the push for an electronic conveyancing system and that they saw it as an opportunity to reduce operating expenses.

Banks have introduced other electronic innovations such as internet banking and ATMs but they continued to allow customers to use cheques and to transact at branches. Will the designers of a NECS build into it a degree of flexibility, taking into account the wide range of IT capabilities and levels of IT expertise within the conveyancing industry?
 
There was much discussion about the concept of an electronic workspace. This is where documents are exchanged amongst parties and where settlements take place. The discussion concerned who would initiate a new workspace. Would it be the lender, the solicitor/conveyancer for the vendor or some other party? Someone asked how much it will cost to join an electronic workspace. No definitive answer was provided.
 
Views were expressed that an electronic conveyance would only be possible if all the parties to a transaction collaborated within the electronic workspace. If one party opted out of the system it would likely make the electronic process unworkable. Will all participants in a conveyance be forced to use an electronic workspace? This issue was not delved into at the forum, possibly because the current focus is still about agreeing on the how the system will work.
 
On this topic, Nathan Harper of the Information Brokers and Law Stationers Association (IBLSA) spoke about the potential role of information brokers in the new system. One of the key roles suggested by Mr Harper was to assist the industry with the huge change management issues that it faced with a NECS. Another person, who identified himself as an information broker, asserted that information brokers will offer an IT interface between the electronic workspace and a conveyancer's case management system.
 
Paul Mackie from NICTA, spoke about his work with LIXI, Australia’s business standards organisation for the lending industry. For more information about LIXI and NICTA see links provided at the end of this report.
 
Chris White from the NSW Land and Property Management Authority (LPMA) quoted some impressive statistics, including that the NSW land registry handles one million pieces of paper per year. He said that they would prefer to receive these as one million electronic transactions.
 
Nationally there are 3,000 property settlements daily with approximately one third of these occurring in NSW. In Australia, $250 billion dollars worth of property is sold each year. For states and territories this provides a major revenue raising opportunity, namely $11 billion in duty collections annually, representing 27% of their tax collections. 
 
There were puzzling statistics as well. NECS is only targeting 70% of all transactions because the other 30% are considered to be too complex for an electronic system. Is this admitting defeat before starting out or is it just being realistic?
 
Chris White informed the forum that the LPMA estimates that currently about 20% of settlements "fall over". While the implication appeared to be that a NECS will help reduce this percentage, no one offered an estimate of what that improvement will be.

View photographs from the forum 

Further information about the consultation process and access to documents is available at www.necs.gov.au. For further information about LIXI and NICTA see www.lixi.org.au and www.nicta.com.au.
 
March 2010 
 
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