Law Society Climate Risk Guidance: Reaction from Groundsure
The Law Society has issued guidance on the legal duties which conveyancers owe to their clients to advise, warn and disclose climate risks — as well as wider climate governance issues.
The majority of the guidance concerns the duties solicitors owe to their clients to advise, warn and disclose climate risks. This is especially relevant to real estate lawyers and conveyancers working on residential or commercial property transactions where the value of assets may be affected by climate change. The guidance is intended, in part, to alert solicitors to the risk of professional negligence if they fail to understand and discharge their legal duties.
Another section of the guidance looks at how law firms operate in relation to climate change, the reputational threat posed by greenwashing, and how they can manage their business in a manner which is consistent with the transition to Net Zero.
Dan Montagnani, the Chief Executive of environmental and climate data authority, at Groundsure said: “The Law Society is the first professional legal organisation in the world to issue climate guidance to its membership and it is to be commended for that. Climate risks — be they physical, transition, or liability risks — are already affecting the value of land and buildings in England and Wales. The impact these risks have on values is only going to increase. Solicitors will need to ensure that they understand the duties and take practical steps to discharge them.
“It’s great to see the guidance has been shaped by the legal opinion from leading environmental practitioner Stephen Tromans KC which Groundsure commissioned and published in September last year. Much of what the Tromans opinion said on duty of care, duty to warn, and duty to disclose is here. This reinforces that view.
We are actively supporting the roll-out of the guidance and have prepared a summary of the guidance for conveyancers and lenders. We will also be setting up training with regional law societies and are running our own webinar events to explore the guidance.
We expect further conveyancing-sector specific guidance from the Law Society’s Planning and Environmental Committee to be published in due course.
Dan Montagnani continued, “The Guidance does not go into depth on how to mitigate risks — it says “Solicitors should not advise on climate change physical risks where it is outside their knowledge or qualification”. But, in Section C, there is a clear view that real estate lawyers and conveyancers need to verify whether climate risks could affect the property transaction in terms of insurance and lending/refinancing. The only practical way to answer these questions is to use climate analysis included within searches to understand the impact of climate risks at specific individual sites.
“Clearly, there are a number of property related matters which are outside a solicitor’s knowledge or qualification. Many real estate lawyers are not tax experts, identity or verification experts, which is why these specialist services are on the market, allowing lawyers to help protect their clients’ investment — and their firm against the risk of a claim.
“The same reasoning applies to environmental searches. Conveyancers are not flood or contaminated land experts. But they have spent 20 years protecting their clients’ investments on that front. Now, the same is true of climate change. This is where we step in. For conveyancing, mitigating these risks means using our ClimateIndex™ analysis, supporting tailored guidance and client care clauses to be able to communicate any risks clearly.
ClimateIndex™ is provided automatically in Groundsure’s main residential and commercial environmental searches and is designed to help lawyers to comply with the Law Society’s guidance.”
Environmental law barrister Stephen Tromans KC of 39 Essex Chambers commented: “We can already see that climate change is having a significant effect on assets in some areas of the UK, through flooding, coastal change and extreme weather conditions. Unfortunately these effects are only going to increase in severity, frequency and geographical extent.
“As well as the physical impacts, there will be economic effects on property values, the ability to sell property and raise finance on it, and to insure it. These must surely be risks which engage a solicitor’s general duty to protect his or her clients’ interests, to inform, to warn and to help interpret available information, if necessary in conjunction with other specialists and experts. It is therefore greatly to be welcomed that the Law Society has produced guidance on this issue. This is undoubtedly only the beginning of lawyers having to grapple with these issues, but it is a very important start.”
Stephen Sykes, an environmental lawyer and the former chair of the UK’s Environmental Law Association said: “Climate change is the defining issue of our times. It impacts everyone and everything to some degree: people, land, buildings and businesses. The Law Society’s pioneering guidance confirms the key role that every solicitor has to play — including our duty to warn clients about climate risks, and our responsibility to ensure our organisations have a low carbon impact. More climate guidance is promised for specific practice areas. Each of us will need to keep informed and take our climate risks and responsibilities very seriously”.
To understand more about the guidance, what this means for firms and how to support compliance, we will be running webinars on 25th April and 16th May.
Apr 19, 2023