The Law Society has alleged indirect discrimination in the newly merged Britannia Building Society and Co-operative Financial Services’ (CFS) decision to axe the 3,600 sole practitioners from Britannia’s conveyancing panel.

The Society said the move would have a disproportionate impact on ethnic minority lawyers, and criticised CFS for failing to carry out an impact assessment before taking the action. The Law Society has set up a meeting with CFS to discuss its concerns this week.

More generally, the Society is deeply concerned by the lack of evidence to justify why some insurers are refusing to provide cover to lenders if their conveyancing panels include sole practitioners. Insurance companies are increasingly declining cover where conveyancing panels include sole practitioners, because they are deemed to present a higher risk of mortgage fraud.

However, the Law Society says no risk assessment has been carried out to demonstrate that this is true.

Chancery Lane said it may press the issue with the Association of British Insurers, individual insurance companies, the Office of Fair Trading and even the Financial Services Authority, once it is in possession of the full facts and if it believes solicitors are being targeted inappropriately.

A CFS spokesman said its decision to stop instructing sole practitioners to act for Britannia or the Co-operative’s mortgage arm Platform Home Loans after the merger in August was due to the fact that its insurers would have withdrawn mortgage fraud cover for the whole business.

He said: ‘This commercial decision was made to protect the business and should not be taken as a reflection on sole practitioners… Any risk assessment that was taken was focused on the risk to the business of not having any cover in place.’Law Society chief executive Des Hudson said: ‘Lenders can rely on all solicitors whether in large firms or sole practice. The regulatory system governing them is robust and there should be no need for lenders to take this line, particularly given the likely effect on ethnic minority solicitors.’