Climate Change - is your client advice meeting the duty of care?
Larger firms have already been thinking about the impact of climate change, especially in the area of corporate advice to clients. But for licensed conveyancers and law firms of all sizes, it is clear that climate change will affect property transactions to a degree that you need to consider whether your advice is meeting existing duty of care, future guidance and standards.
Recognising the risk and your duty to clients
David Kempster provides an overview of the main climate risks and why conveyancers and commercial real estate lawyers need to take heed of the important legal opinion that has been released this year on advising clients. The duty of care is already here.
Conveyancers’ Duty of Care to Advise Clients about Climate Risk
Risks change over time. Climate risk analysis is now an essential part of understanding the forward risk on clients’ land and property transactions.
Now, exclusive to Groundsure, one of the UK’s leading environmental law practitioners, Stephen Tromans KC, has released his legal opinion on a firm’s duty of care to advise residential and commercial property clients on climate risk. It’s essential reading for all conveyancing practitioners and available to download free now.Download
Do Solicitors have a duty of care to advise about climate change impacts on property transactions?
In this video, Stephen Tromans KC, discusses what advise should real estate lawyers give clients on the impacts of client change. And if Solicitors have a duty of care to advise about climate change impacts on property transactions.
Next steps to guidance from lenders
The Bank of England/Prudential Regulatory Authority required lenders to undertake stress tests on their back books to ensure that they were not unduly exposed by climate change. The Bank now views Climate Change as a Tier 1 lending risk.
In order to maintain compliance to their regulator, lenders are now looking at how to ensure that new consumer and commercial business is screened. At our climate change conference in June 2022, Matt Jupp – principal of Mortgage Policy at UK Finance clearly stated that lenders would be reviewing their guidance to conveyancers for environmental risks in the future.
Next steps to guidance for lawyers
The Law Society is developing two strands of guidance at the moment, which are planned to be released by Spring 2023. One, being developed by the Society’s Climate Change Committee, is looking at the general ethical and ESG considerations for firms with the advice and practice across all matters related to climate change.
Guidance specific to residential and commercial conveyancing is being developed by the Environment and Planning Committee, led by Seb Charles, Founder at Aardvark Planning Law. At our Conveyancing Climate Conference, Seb outlined the main points of focus with the developing guidance.
The insurance complications of climate change for Real Estate Lawyers and clients
Insurers will be paying greater attention to firms’ exposure and will want to see clear risk and compliance measures in place on climate advice as part of their wider ESG policy from the highest levels down through the organization.
This will apply especially to conveyancing through the data, education and tools that are used to advise clients of potential risks. Stephen Sykes, Environmental Lawyer at Capital Law, outlines some of the implications in this video.
Next steps to guidance for valuers
RICS has had guidance on “sustainability” in the Red Book for a number of years and provides advice to members on what they “should” comment on with respect to potential issues with the property that could be impacted on and its degree of sustainability.
They currently provide valuations on the basis of current market value, which has a precise definition and does not project forward to any impact on future value due to climate change. This position may change but law firms will be likely required by lenders to use available climate data in environmental searches to flag any risks.Download Guidance Note
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