The Gazette 1986

INCORPORATED LAW SOCIETY OF IRELAND

GAZETTE

Vol. No. 80 No. 9

November 1986

Grasping The Soft Option

he trend towards legislation by delegation seems to

have reached its apogee with the Building

Societies (Amendment) Bill of 1986. The Bill covers eight

topics and only one of them, the prohibition of tiered

interest rates, is wholly dealt with in the Act. All the other

provisions, either directly or for their implementation,

require the making of regulations by the Minister. The

most charitable explanation of this development is that

the perceived urgency of dealing with the supposed evil

of tiered interest rates necessitated the immediate intro-

duction of legislation at a time when the preparation of

legislation dealing with the other topics had not proceeded

far. However, the failure of the Oireachtas to insist that

legislation such as this receives its normal scrutiny augurs

well for other, arguably more significant, pieces of

legislation.

It is remarkable that the practice of Building Societies

engaging their own solicitors to re-investigate the title,

which the great majority of solicitors would regard as

unnecessary and which has been condemned by the

Council of the Law Society, is to continue. It is even more

remarkable that the Minister has apparently reneged on

the position adopted by his predecessor who said on the

29th of May, 1985, that he could not understand why the

normal practice in Great Britain and Northern Ireland,

where Building Societies appoint the purchaser's solicitor

as their agent to complete the mortgage on their behalf,

could not operate here. The U.K. system, which operates

under an agreed scale of charges, results in only modest

additional fees for mortgage work being charged, instead

of the 1%-plus charged by Building Societies' Solicitors

here.

The Minister would gain credit if he were to introduce

amendments dealing substantively with such matters as

charging of redemption fees, the provision of surveyors'

reports and restrictions on insurance. The drafting of such

provisions should not prove insuperably difficult.

The power to be taken by the Minister to regulate the

cost of legal investigation of title (a curious phrase — is

there "illegal investigation of title"?) seems so limited

as to represent a capitulation to the Building Societies'

lobby. "To restrict a Society from requiring a member

to pay its costs of legal investigation" will merely shift

the burden from the individual member to the members

collectively. It is not easy to envisage these costs being

absorbed by the Societies as part of their management

expenses. The practice of the one Building Society, which

engages an in-house solicitor to investigate title, hardly

encourages such a belief.

Since the above was written, the Dáil has with unseemly

haste, with no amendments and no discussion after the

Second Stage Debate, passed the Bill. The neglect by

Deputies of their obligation to scrutinize legislation in

depth at the Committee Stage has become only too com-

mon. No Finance Bill in recent years has been fully

debated.

It is to be hoped that the Seanad will take its duties

more seriously and that some energetic and persuasive

Senator will put down a Committee Stage Amendment

requiring, in the wording of the Law Society's resolution,

"that Lending Institutions will accept Certificates of Ti-

tle from purchasers' solicitors and entrust the comple-

tion of the mortgage security to such solicitors", thus

significantly reducing the total cost to the borrower. •