The Gazette 1986

INCORPORATED LAW SOCIETY OF IRELAND GAZETTE Vol. No. 80 No. 9 November 1986

Grasping The Soft Option

T 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. 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.

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. 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. •