Solicitors and property practitioners are not expected to be experts in environmental law but they must advise clients on the potential impact of climate change on property transactions and signpost them to further resources should the issue arise.
In a panel discussion at the Law Society’s Property Conference, the message was clear and practitioners are encouraged to take part in the current consultation into providing clearer guidance ahead of the publishing of a practice note on the topic.
The Law Society launched the consultation in September to seek views on the proposed practice note which will provide practical guidance on:
- How climate change and its associated risks are impacting the UK’s property stock.
- Understanding solicitor duties related to climate risk and liability.
- Communicating climate risks to clients, lenders, and other stakeholders.
- Navigating climate-related searches and advising clients on how to act on the results.
The consultation will run until 31st October 2024 and respondents can contribute via The Law Society’s website.
During the panel debate the role of conveyancers in climate change was explored, with discussion chair Warren Gordon, Senior Professional Support Lawyer at CMS Cameron McKenna Nabarro Olswang LLP explaining it is necessary to explain the potential liability risks associated with climate change; which include the longer term value and saleability of the property and the ability to get insurance.
Environmental Lawyer Keith Davidson said practitioners needed to be clear with clients about what they are able to advise on, and what they are not. He added the practice note would include a checklist of points to consider to enable firms to adopt a proactive approach.
Be clear about what risks there are, clear about what your instructions are, and what you’re going to do, and retain contemporaneous notes
said Davidson. Challenged on the the liability of firms in the event of providing guidance, Davidson added there is a risk of firms being considered negligent if they fail to advise and said it was important to provide information to clients and signpost them back to the data providers in the event of risks being identified for further advise.
It was a sentiment echoed by David Kempster, Marketing Director at Groundsure who added the expectation was not on firms to be climate change experts, rather – like contaminated land and flood risk – to advise on the potential risks and point clients in the direction of resources and expertise to help.
In a series of polls conducted throughout the panel discussion 88% of attendees indicated they now order climate searches, whether as part of their environmental reports or separately. 70% they excluded climate advice from their retainers and report on title.
43% of attendees indicated they did not include any information about climate change risks in their client engagement letters or reports on title; something the panel felt was important when communicating the limits of liability and being clear about the role of property practitioners in establishing risk.
Philip Askew, a partner at Stone King added it was safe to assume many clients simply didn’t understand the potential impact of climate change on property transactions and including it in terms of engagement was important as part of client communications. He also flagged the increasing expectations of lenders to have done some diligence and suggested it was important to engage with the firm’s risk teams and insurer to agree wording and signpost clients where additional advice is needed.
There was acknowledgement on the panel around the continued work required to support practitioners with the topic; a short discussion on leasehold properties highlighted liabilities with regards responsibility for damage caused and who makes the claims in the event of a climate change related issues; and practitioners are reminded to check the UK finance handbook and lender requirements.
Ultimately practitioners have a professional duty to explore climate change concluded Davidson and the practice note will provide some clear steps on what best practice around that will look like.
The Law Society confirmed the new guidance is planned to be launched in January 2025 once the consultation closes and the results have been reviewed and collated.