The Law Society has today written an open letter to solicitors outlining its strategy and guidance for addressing HSBC’s highly controversial decision to introduce a conveyancing panel comprising just 43 firms. President John Wotton has already complained to business secretary Vince Cable, while talks took place on Wednesday this week between Chancery Lane and panel manager Countrywide.

In the letter, chief executive Desmond Hudson urges solicitors to contact their MP in protest and consider using any shareholding they may have in the bank to air their grievances. 'This decision by HSBC is damaging both to the consumer interest and to the profession and operates in our view to no one's interest other than the short term interests of Countrywide and HSBC,' said Hudson.

Read the letter in full.

In a separate development, Nationwide building society is undertaking another overhaul of its own conveyancing panel, removing firms that have not done work for its customers in the last 12 months. The Society criticised the use of dormancy as a 'blunt instrument' that could result in firms that have high standards in conveyancing being removed.

Nationwide, which has around 10% of the UK mortgage market, has sent letters to some affected firms and will be sending others out over the next few weeks. A spokeswoman for Nationwide said today the action is a 'business as usual’ review to ensure that its panel is kept up to date with firms that are still practising.

She was not able to give an indication of the number of firms who might be removed, but said Nationwide will retain its panel of several thousand firms.

Firms with the Law Society’s Conveyancing Quality Scheme accreditation or which can prove that they have been active in the past 12 months will be able to appeal for reinstatement.

Hudson said he appreciated Nationwide consulting the Society on the move, but added: 'Dormancy based on zero transactions for Nationwide in 12 months is a blunt instrument for panel reviews. There are more sophisticated and accurate ways of assessing dormancy.’

Hudson acknowledged the opportunity to appeal removal decisions. He said: 'While we welcome what is yet another show of confidence in CQS from the lenders, Nationwide should look again at their dormancy criteria. It makes little sense for them to remove a firm based on dormancy with Nationwide when that firm has had an active 12 months with other lenders.’

He said Chancery Lane is in regular 'dialogue' with Nationwide and will continue to discuss the issue with them.