Molly Thomas, The Legal Forecast

 

The face of conveyancing in Australia and New Zealand is changing, but is the industry moving fast enough?

It has been 10 years since the Council of Australian Governments committed to creating a single, national e-Conveyancing mechanism for the Australian property industry (Australia is trying to catch up to New Zealand in this respect). This mechanism, now known as Property Exchange Australia (PEXA), has proved to be a popular marker of innovation in the property industry.

A recent report by Deloitte found that the net benefit of 2% of electronic lodgements to practitioners of the e-Conveyancing system in 2016-17 stood at $0.2 million.[1] The report goes on to forecast that the net benefits to the conveyancing industry will balloon out to $89 million per annum when a 100% digital lodgement and settlement process is reached. But how will we get there? And what is standing in our way?

Research by GlobalX last year found that more than 91% of respondents viewed electronic conveyancing as inevitable, with 72% of respondents saying it would positively impact the industry.[2] This positivity is especially important given the growing rate of transactions and the ever-slimming profit margins on conveyancing services.[3] Deloitte’s research found that traditional conveyancing involves a large amount of time-intensive tasks, with anecdotal evidence from practitioners noting that they spend up to 45 minutes on the phone with financial institutions and up to two hours travelling to settlement.[4] This means it is increasingly important for firms to find ways to cut conveyancing costs. This should be reason enough for the whole industry to embrace digitisation, but this has yet to happen.

The Deloitte report provides a few reasons for this. Transitioning a 160-year old paper process to a digital one takes time, and involves a steep learning curve. Moreover, while the industry transitions to 100% digital, the two processes need to coexist. As a result, if one party in a transaction has not adopted the electronic option, the whole transaction reverts to paper. Also, at this time, certain instruments simply cannot be lodged electronically, or aren’t presently required to be lodged electronically.[5]

However, it has also been noted that the uptake in Queensland has been especially slow,[6] which might suggest that the reluctance to embrace electronic conveyancing goes beyond growing pains. Part of this may be from early concerns about security.[7] Although, it must be pointed out that cyber-security risks existed long before the emergence of e-Conveyancing and have been an industry wide concern.[8] That is why industry players such as the Queensland Law Society have routinely highlighted to its members the need to be cyber aware.[9] Email fraud is a systematic issue in the legal profession, which goes beyond the conveyancing process.[10] This should not – and indeed cannot – impede the embrace of electronic conveyancing. It should also be noted that with more practitioner uptake, electronic conveyancing will be easier to regulate, and bad actors easier to detect.

Therefore, looking holistically, the forecasted figures for 2021-22 are possible and the industry is well ahead of schedule. The quicker we get there; the faster practitioners will be able to realise the benefits.

 

 

 

[1] Deloitte Access Economics, Impacts of e-Conveyancing on the Conveyancing Industry (Deloitte Access Economics, May 2018) <https://www2.deloitte.com/content/dam/Deloitte/au/Documents/Economics/deloitte-au-economics-impact-e-conveyance-pexa-220518.pdf> 1-2.

[2] Sol Dolor, ‘Most Qld Property Lawyers Still Waiting on Clear Rollout of Electronic Conveyancing’ Australasian Lawyer, 9 September 2017, <https://www.australasianlawyer.com.au/news/most-qld-property-lawyers-still-waiting-on-clear-rollout-of-electronic-conveyancing-241416.aspx>.

[3] Neil Rose, ‘Pity The Poor Conveyancer’ The Guardian, 20 January 2012 <https://www.theguardian.com/law/2012/jan/19/conveyancers-struggle-to-survive>.

[4] Deloitte, above n 1, 11, 21.

[5] Deloitte, above n 1, 15-16.

[6] Dolor, above n 2.

[7] See examples of concerns about security in the United Kingdom: Land Registry, Report on responses to e-conveyancing secondary legislation part 3, 2011.

[8] See e.g. recent email scams: Toby Crockford, ‘Queensland Law firms Lose Millions to Hackers in ‘Highly Sophisticated’ Email Scam’ Brisbane Times, 17 December 2017 <https://www.brisbanetimes.com.au/national/queensland/queensland-law-firms-lose-millions-to-hackers-in-highly-sophisticated-email-scam-20171217-p4yxsb.html>.

[9] Queensland Law Society, ‘Cyber Security’ <http://www.qls.com.au/Knowledge_centre/Ethics/Resources/Cyber_security>.

[10] Crockford, above n 8.

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