Registers of Scotland Executive Agency (RoS), the Government Agency responsible for maintaining 15 property and court registers in
By way of background information, since the inception of the General Register of Sasines in 1617 (a Register of Deeds relating to rights in land), conveyancing and registration in
ARTL aims to streamline the current process of registration, and with it conveyancing. It intends to achieve this by introducing an innovative process linked to tried and tested Web-based technology to the business of registration in the Land Register. ARTL will offer an alternative to the current paper-based process by enabling authorised persons – solicitors and lenders in the main – to carry out registration online using digital technology. Paper deeds and paper application forms will be replaced by digital equivalents. In addition, conveyancers will no longer have to separately contact a number of different Government departments, namely the Inland Revenue Stamp Taxes Office, Companies House and Registers of Scotland. Instead the ARTL system will create a one-stop shop.
ARTL in practice
No specific software or equipment beyond a Web browser is required in order to interact with the ARTL system. The solicitors involved in a property transaction enter the essential client and transaction details into the ARTL system. For those firms who are technology driven, adoption of XML standards will open the door for third-party case management systems to populate the fields in ARTL. All of the processing, including the creation of the necessary digital deeds, is carried out by the ARTL system with nothing being stored on the solicitor’s computer.
The ARTL system uses this information to prepare and validate a digital application and generates error-free digital deeds, which are then digitally signed by or on behalf of the granter. The system also assesses whether stamp duty is liable. When the applicant’s solicitor instructs the ARTL system to register the transaction, stamp duty and registration fees will be debited from the account of the solicitor seeking registration. This will be achieved through electronic fund transfer. The details provided by the solicitor along with the digital deeds will then be validated automatically and the system will populate the updated title position into the Land Register itself.
It is at this point that RoS staff will have their first involvement with the registration process. Staff will conduct a registration check to verify the title position. Once satisfied, RoS staff will confirm the automated registration. This permits a process that currently takes several weeks to be performed overnight.
Currently when registration is completed the applicant is sent a paper certificate of title and any charge holder is sent a paper charge certificate. Whilst the option to create paper certificates of title will be retained applicants under ARTL will be given the choice to receive their certificate of title in electronic format or not to receive a certificate at all but simply to receive notification that their title or charge has been registered. Mortgage lenders are generally keen to take this opportunity to dispense with paper tokens of title, so avoiding the expense of handling and storing paper certificates.
Technology and digital signatures
For the introduction of ARTL it will be essential that there is the ability to transact with confidence over the Internet. The most obvious way that this can be achieved is through the application of a Public Key Infrastructure (PKI). There have been a number of PKI vendors appearing on the market recently with a couple being set up specifically for use in the legal community. One of the most prominent of these is ‘Lawseal’, which has been set up by the Law Society of Scotland in partnership with the Royal Bank of
When ARTL was initially envisaged, there was no ability, or desire, to create digital deeds as part of the automated registration process. The original idea was that the packet of data that was entered by the solicitor would be enough evidence to allow changes to the details held on the title sheet. This ‘data packet’ approach met with some acceptance from the more technologically advanced firms but was not popular with the more traditional firms or with the institutional lenders. To increase the acceptance of ARTL as a concept, the ability to create and sign the necessary digital deeds was added into the pilot system. Since the introduction of these digital deeds there has been a greater acceptance of ARTL in the legal community.
Development and implementation of ARTL
In order to deliver a system of online registration that stakeholders in the conveyancing process will use, the project has sought actively to engage the legal profession and the lending institutions from the outset. It was also considered that a long lead-in time would be required, not only to engender confidence in the e-environment from a profession who are rightly cautious and risk averse but also to enable technology and IT suppliers to meet the demands of the e-conveyancing ande-registration environment. This is particularly true as regards the provision of low-cost, secure and trusted digital signatures. It is only recently that a marketplace in the provision of digital signatures has begun to emerge, initiatives such as ARTL can only add to the demand for these services that will help ensure that there is competition between suppliers.
The consultative approach to ARTL was evidenced by the strategy of engaging the profession through a pilot system of online registration. From January 2001 through to April 2002, a pilot exercise involving over 60 law firms, 5 lenders and 2 local authorities was in operation. Under the pilot, participating firms continued to submit their applications for registration in paper form but at the same time conducted an online registration. The results were compared to ensure the same changes to the register were created but more importantly it provided a vehicle for raising and addressing the many issues, concerns and problems that are associated with such a revolutionary change in the way conveyancing and registration are undertaken. This allowed the ARTL system to be developed to accommodate the requirements of all stakeholders.
Following completion of the pilot, RoS has been engaged in ongoing consultation with stakeholders. These consultations have shown that there is overwhelming demand for the principle of introduction of automated registration, tempered by the concern that the details of the system must be correct to meet the needs of the legal profession and mortgage lenders. RoS are, by dialogue with solicitors’ representative bodies, the Council of Mortgage lenders and several individual firms and lenders, steadily working through these issues. Central to the consultation process is a memorial that was issued to four conveyancing professors in
Although unable to be certain as to the timing of enabling legislation, RoS hope to go live with ARTL in 2006.
Legal and cultural change
If ARTL simply involved a change to a business process, it could have been, and presumably would have been, introduced long since. Instead there are more general legal, business and cultural hurdles to be overcome in successful implementation of ARTL. In short it will spearhead the most radical change to the practice of conveyancing and registration in the last 100 years.
Scots property law is founded on the use of paper duly executed by a hand-written signature, and legislative change is therefore necessary. With the exception of stamp duty, the legislative changes required fall within the devolved competence of the Scottish Parliament and RoS expect to seek enabling legislation in that forum. The timescale for achieving legislative reform will depend on whether primary legislation is required for any of the changes. If changes can be made through subordinate legislation, use will be made of s8 of the Electronic Communications Act 2000, which permits secondary legislation to amend primary legislation for the purpose of enabling non-compulsorye-commerce initiatives. Indeed some legislation is already in place. The acceptability of electronic signatures is already provided for through the Electronic Signatures Directive and s7 of the Electronic Communications Act 2000.
The need for legislative change is not an obstacle to ARTL. Scottish Ministers are committed to enablinge-registration and will provide the legislative vehicle to create the statutory framework for it to function. Much more of an obstacle is the need to overcome the legal profession’s strong cultural attachment to physical deeds with hand-written subscription. Solicitors are rightly cautious about the transformation of a process that has served their clients well. Achieving cultural change, and the change in business practices that must go with it, requires to be a managed process. The RoS approach has been to keep the stakeholders informed and involved throughout the development process, listening to issues and, as need be, either allaying fears or acting to remove concerns.
Achieving buy-in
So what can ARTL offer?
- ARTL transactions will attract reduced registration fees, thereby cutting the cost of conveyancing to both the public and those lenders who meet the legal and registration costs of the debtor inre-mortgage transactions.
- Solicitors and lenders will benefit from dematerialization. Less paper means less storage and an end to replicating lost paper documents.
- Savings in time and administration. Online communications with other stakeholders can be instantaneous and much less costly than traditional postal methods.
- Delays are minimised. Registration can be completed on the day a transaction settles, thereby minimising the risks to the client and lender.
- Paper deeds are easy to forge. A secure controllede-registration environment in which solicitors and lenders can interact with the Land Register, supported by digital certificates as a means of authentication backed up by a secure audit trail makes fraud much more difficult to perform and easier to trace.
- Streamlined conveyancing ¯ solicitors need only interact with one Government body.
- ARTL offers in-built quality assurance, thereby ensuring that both the digital deeds and the application to register contains all relevant information.
Wider Impact of ARTL
The project is blazing a trail that will have wider significance in the development of electronic delivery of legal and other online services in
Ian Davis is Director of Legal Services at the Registers of Scotland Executive Agency.
