As we come to the end of 2021 and look forward to 2022, there is no doubt that the UK’s legal industry is on the edge of a digital transformation, and this appears to be accelerating. Georgetown Law and the Thomson Reuters Institute stated in their ‘Report on the State of the Legal Market’ for 2021 that the pandemic and other domestic and global factors “may have softened partner resistance to fundamental change enough to create a tipping point in the pressures building for a significant redesign of our legal delivery systems — including law firms”. Core to this redesign of legal services is digital technology. It is not just the legal industry that is changing how it delivers its services through digital means; other agencies and public entities with whom law firms deal on a daily basis such as the courts, government departments, and regulatory bodies are rapidly “going digital”, removing the use of paper, leading to considerable advantages including faster, more efficient, and in some cases, automated services. A perfect example of this shift is the recent implementation of digital processes by the Land Registry.
HM Land Registry Announces Its First Digital-Only Process
It is well known that the Land Registry has been slowly shifting its services to digital platforms, but the speed at which this is happening is gathering pace. Until now, however, law firms and other parties have been able to choose how they deal with the Land Registry (i.e. by using paper or digital methods). This will change in 2022 when they ‘go live’ with their first digital-only service – the Digital Registration Service on the HM Land Registry portal. This is used by conveyancers to enter changes to the title of a property. The digital service is already in place and has been since April 2021, but the Land Registry has now confirmed that as of November 2022, they “will no longer accept scanned or PDF copies of AP1s for changes to existing titles via the HM Land Registry portal”. In other words, they will only accept digital AP1 applications in 2022.
As a result of their plan to make title changes digital-only, the Land Registry is now encouraging property law specialists to plan ahead and consider how they will switch over to creating and submitting digital AP1s as soon as possible. In the words of Simon Hayes, Chief Executive and Chief Land Registrar:
“A digital application process, based on data rather than traditional paper-based methods, is fundamental to transforming the way we register land and ultimately will play a vital role in improving the end-to-end conveyancing journey. Not only does it offer the immediate benefits of quicker processing times and fewer errors, but it opens the opportunity for further innovation in the future”.
It is important to stress that there is no finalised date for forcing new title changes through the digital channel as the digital service is still in the testing stages and will likely undergo some changes and final approval before this is done, but it is recommended that law firms affected should engage with this new process as early as possible. While there is a year until this change is mandated, as we all know, this will be here before we know it.
Digital Identification Will Become The Norm
Another of the Land Registry’s technological developments, which may also become mandatory, is the digital verification of the identity of parties to a property transaction. A process that has traditionally involved manually checking passports and other forms of ID, and hence was prone to potential fraud, can now be completed digitally using the latest cryptographic and biometric technology. The Land Registry has developed a new technical standard for digital ID verification, however, this is not yet mandatory. On this, they state, “we want to stress that the published requirements are not mandatory. Other existing means of verifying identity will always be available. However, those who have met the requirements will be protected, as HM Land Registry would not seek recourse against a conveyancer in the event their client was not who they claimed to be”. This latter point is crucial and will likely apply for other touchpoints between law firms and a range of government and other external agencies. By adopting the latest digital standards and processes as early as possible, businesses in the legal sector will not only protect themselves, but they may be more attractive to prospective clients (individuals and businesses) who appreciate the safety and security provided by such technology.
More and more law firms are investing in technology, both because they have had to adapt to changes in how we work (e.g. putting in place secure technology to allow legal practitioners to work from home), and also because digital processes are becoming increasingly mandated by outside entities with whom they interact on a daily basis. The recent announcement by the Land Registry of a digital-only process will almost certainly be followed by such changes for the legal industry. Indeed, in a small number of years from now, digital-only law firms may become the norm in the UK (this is already a major selling point for law firms), bringing benefits including a reduced environmental footprint, greater security and privacy, and faster and more efficient transactions. We, for one, are keen to embrace the digital technology revolution in the UK’s legal industry.
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