Make sure you have your say on proposed climate risk and conveyancing practice note

The Law Society’s conveyancing and land law committee is responsible for production of a proposed new climate risk and conveyancing practice note.

A consultation on the practice note is under way. There is still time to respond to the consultation, which runs until 31 October, so make sure that you have your say to ensure this practice note will be relevant and appropriate for conveyancing transactions, whether large or small and commercial or residential.

As members of the conveyancing and land law committee, we have to grapple with a wide range of varied and complex issues.

One new area of general societal importance where conveyancing solicitors are increasingly seeking guidance from the Law Society is risks arising from climate change and, chiefly, how this affects their business.

They want guidance on how best they can advise their clients, and the climate risk and conveyancing practice note on which the Law Society is currently consulting sets out to help fill this knowledge gap. There is the existing Law Society note from April 2023, but the new practice note will provide more specific and focused content for conveyancing transactions.

The committee has been working alongside conveyancing and environmental legal groups to explore how a new practice note could support members with their professional duties and best practice.

It is important to make clear that this is guidance aimed at conveyancers, and conveyancers are not expected to become environmental experts. However, the draft practice note and consultation outlines that solicitors are increasingly under a professional duty to consider how climate change risks and liabilities may impact the property and the transaction on which they are advising. In the majority of these cases, very little will need to be done so it will usually not be onerous.

The proposed practice note will provide practical guidance on climate risks and how they impact on conveyancing transactions.

Understanding climate risks

Climate risks are a growing material risk for UK properties. They can be split into three groups – physical, transition and liability/legal risks.

Physical risks are due to climate change leading to more frequent and severe weather events which may impact property resilience, value and insurability.

Transition risks occur when our society moves towards the UK’s net zero by 2050 goal. These risks are the changes made by governments, industries and consumers to respond to climate change.

Liability/legal risks are an actual or potential adverse impact for individuals or businesses arising in consequence of the physical or transition risks.

Such liability or legal risks may be, for example a new financial penalty, a development not being able to be implemented as originally planned, or an extreme weather event impacting on the ability to exercise or enforce legal rights or comply with legal obligations.

Solicitors’ duties and advice

Also covered by the proposed practice note would be how solicitors' professional duties interface with climate risk in conveyancing.

While solicitors are not normally expected to give detailed advice on physical risks, they should warn clients about potential legal liabilities arising from climate risks.

They should also discuss climate risk with the client and explain that one way to gain further information on the physical risks posed to the property is to order a climate search, explaining their importance and limitations

Solicitors are not expected to advise upon the content of a climate search, but should disclose its contents as part of the solicitor's professional duty to warn clients of risks. Solicitors may also mention who the client should contact if there are queries on the climate search or other issues in relation to physical risks on which solicitors are not qualified to advise.

Acting for clients

The practice note will highlight that the advice provided by solicitors and whether to order a climate search will, among other factors, be influenced by the characteristics of the property and the client’s own awareness of and investigations in relation to climate risks.

Solicitors should assess clients' intentions for the property and their risk appetite in relation to climate risks. Considerations include intended duration of ownership, clients’ access to expertise and for commercial clients in particular their own sustainability targets.

For example, from my own experience in practice (Joanne) I have found some postcodes, whilst having never suffered from flooding, have still found themselves struggling to locate buildings insurance providers and quite often having to provide additional evidence before cover is issued. A climate search should flag this to clients so any queries or issue arising as a result can be dealt with early on in the transaction.

Solicitors will also need to advise clients on lenders’ requirements in relation to climate risks and how such risks will impact on the availability of insurance and its terms.

If you disagree with any of the proposals set out above or in the consultation, please respond to the consultation as this will help to shape the final form of the practice note.

 

Warren Gordon and Joanne Parsons are both members of the Law Society’s conveyancing and land law committee and the Law Society’s Property Section committee