March 2009

I am now 6 months into my presidential year and it is startling just how quickly the time is going. I had no idea when I took on this prestigious role what lay ahead and I certainly wouldn’t have predicted what an interesting, challenging and difficult period we, as a country, and a profession, were entering. It is very evident from my recent visits, both here and abroad, that the recession is a global problem as businesses and individuals struggle to keep going.  

 

In January I was invited, as one of the principal guests, to visit Hong Kong and Shanghai for the opening of the Hong Kong legal year. The legal system in Hong Kong still follows the common law legal system that was established during British rule back in the 19th Century, although there is one big difference – their Courts appear to be much busier than ours.  

 

Hong Kong was colonised by England back in 1842 with the establishment of Victoria City and there are still signs of that early influence as many Victorian style houses still remain. Whilst it is a very cosmopolitan city with a modern, expansive skyline of high rise buildings it still retains many English traditions. Hong Kong has often been described as “East meets West” and this is evident as you walk along many of the streets and spot Marks & Spencer, Starbucks, etc. and the view along the river could almost make you believe you were in Canary Wharf and not thousands of miles on the other side of the world.  

 

Shanghai is finding it particularly hard to survive this current crisis and unemployment figures are running high largely because the majority of their trade is in the export industry and European businesses are simply not buying.. Conversely Shanghai operates a major cardboard recycling business; companies would purchase used cardboard boxes, recycle them and create new boxes but they have stopped taking the cardboard because the demand for their product has dropped dramatically.

 

Last week I continued my tour of the country by visiting legal practices in Devon. I met up with lawyers from Barnstaple, Taunton and Exeter to talk about what life is like for them. They are finding it particularly hard because they don’t have the same level of high net worth clients in the South West as we do in the South East. A significant proportion of their business is legal aided family work.

 

I also took the opportunity to visit a very busy and successful commercial property firm who operate in England and Wales. It was good to see a business that is thriving in these difficult times and this seems to be because they are organised, focused and in tune with the marketplace and the needs of their clients.

 

On Wednesday 25 February, I have been asked to speak at the Dorking Financial Services Seminar at Denbies Wine Estate in Dorking, Surrey. This is a joint initiative between CIPFA and the Law Society. The focus of the event will be to promote the fact that Solicitors are able to offer financial services to clients.  

 

I am returning to Vienna this weekend for a conference, a city I first visited over 20 years ago.

 

There is some good news if you are a flat owner and have lived in your property for at least two years. With the current slump in property prices now is a good time to consider extending your lease. The majority of leases run for 99 years, but once they have less than 80 years left to run the cost of buying a lease extension increases significantly. However, it is possible to extend the lease and it is cheaper to do so when the market values are low, as the cost of extending is partly determined by the value of the property. Extending the lease now could make your property more saleable, especially if you are waiting for prices to go up before putting it on the market. 

 

Also, Lenders are reluctant to lend to a buyer purchasing a short lease, as mortgagees tend to require the lease to be at least two-and-a-half times the length of the loan. A lender is unlikely to offer a 25 year loan on a lease that has 35 years to run.

Sellers with longer leaseholds could see more interest from potential buyers who stand a much greater chance of obtaining a loan.

 

The HIPs Regulations are changing at the end of March 2009 in that personal searches will not be backed by insurance and householders will not be able to market their property without being physically in possession of their HIP. It is no longer enough to say it has been ordered.   Therefore, it is even more important to obtain your HIP from a Solicitor.

 

The Land Registry is currently talking to various commercial concerns, together with the Law Society regarding a joint e-conveyancing venture. I have been appointed Chairman of the E-Conveyancing Committee Task Force who have been commissioned to develop an e-conveyancing strategy. Therefore, what I don’t know about e-conveyancing is not worth knowing!

 

Before I sign off this latest entry, I would like to add a note of caution to anyone who has a Will but has not recently updated it. Something you may not realise is that the credit crunch is making Wills written in healthier economic times out of date and in urgent need of updating. With home values plummeting and other investments struggling, many assets in a person's will have lost value.

 

Therefore, if you want to leave friends and family in a secure position after you pass away you might find that what you have left in your Will has considerably less value than when it was originally written. 

 

If you haven’t updated it recently, it is essential you go to your solicitor to review it and, if needs be, change it to reflect your current financial situation.

 

If you do not have a Will, now would be a good time to write one or risk leaving friends, families or other intended recipients of your assets with nothing.

 

I am returning to Hong Kong in April to attend the Commonwealth Law Conference where I have been invited to give a speech on lawyers’ duties to the Court.

 

I am off to Qatar in May and I will be visiting Chester and York as I continue to meet with different legal practices to learn more about the challenges and issues that face the legal profession.