End the lawyers' monopoly on conveyancing in Malaysia

End the conveyancing monopoly

Lawyers set outrageous fees despite the fact that the work done does not involve additional skill.

WHEN I started my legal practice many years ago, it was quite common for lawyers to give discounts on fees chargeable for conveyancing and loan transactions. In fact, some of us charged time costs to clients because the work was quite straightforward (even if the sums involved were large).

In those days, there was already a no-discount rule. The legal fraternity then was more realistic and the Bar Council was lenient when it came to the amount of fees we could charge: no one would be liable for disciplinary action for not following scaled fees, and breaches were more frequent than observance. Those were happy days.

By and large, conveyancing and loan documentation for financial institutions are straightforward matters. They usually involve standard terms that lawyers use on a daily basis without much effort (though some lawyers might dispute this).

Conveyancing fees are what we call “easy money” – clerks do all the work and lawyers collect their fees for signing on the right pages. The higher the value of the property, or the value of the bank loan, the higher the fee.

I have never thought it right to charge high fees on this basis; after all, high-value residential property transacted in Ampang, for example, requires the same work and skill as that of lower-valued property in Klang, so why should there be a difference in fees?

The fact is that the scaled fees mandated by the Bar Council favour the lawyer who undertakes larger property transactions – but why this is so can be difficult to understand, and I suggest you read Michael Joseph’s Conveyancing Fraud, which was first published in 1989.

Joseph was an English solicitor who did his part to expose the arbitrary and unfair system by which the Law Society of England and Wales (the governing body for solicitors) set outrageous fees despite the fact that the work done had no relation to any additional skill.

Ultimately, good sense prevailed and solicitors lost their monopoly over conveyancing in England and Wales. A new breed of professionals called “conveyancers” was given the right to do this work as well and, as a result, fees were much reduced and services improved. That’s what competition does to any industry.

But not in Malaysia. Here, the Bar Council still insists that only lawyers can undertake conveyancing work and scaled fees must be strictly followed – a practice abandoned long ago in other Commonwealth countries.

When it comes to this issue, the Bar Council somehow always overlooks the question of public interest. It seems that, to the Council, it’s their members’ interests that are more important.

The economist Adam Smith warned us 250 years ago that when people of the same trade met, the conversation usually ended up in a conspiracy against the public through the raising of prices.

We now have the Competition Act 2010, which in essence seeks to promote the competitive process, and the rule of the game is to discourage anti-competitive behaviour. The stance taken by the Bar has been definitely against the Competition Act, although no one dares to challenge the lawyers’ monopoly.

The question remains: why must lawyers be the only type of professionals allowed to do conveyancing work?

A solicitor friend countered this view by saying that the Competition Act itself allows for exclusion. For example, Section 13 of the Act exempts any agreement or conduct that complies with a legislative requirement. My friend argued that the Solicitors’ Remuneration Order 2005 (which allows for scaled fees to be charged) is such a legislative requirement.

But wait a minute. I’m not saying that the Bar is in violation of the Competition Act. I’m saying merely that the Bar’s monopoly on conveyancing is not in compliance with the spirit of the Act. The Bar is once again out of touch!

The Malaysian Competition Commission, under the able leadership of former Chief Judge of Malaya Tan Sri Siti Norma Yaakob, should exercise its power under Sections 11 and 12 of the Competition Act to perform a “market review” of the situation and publish the results.

I am sure such a study will show the need for the establishment of a new breed of professional conveyancers so as to give lawyers some fair competition, and I’m sure the market review will benefit the public immensely.

Arguments that conveyancing work is complicated and must be done by lawyers have already been used in Australia and England, and have been found to be baseless – in fact, the quality of conveyancing services in Australia and New Zealand actually improved after the lawyers’ monopoly was broken.

In Malaysia, there are many former legal clerks and Land Office employees who can qualify and be registered as conveyancers. Of course, local conveyancers will have to be properly regulated under their own professional standards organisation to ensure that a high quality of work will be maintained.

The lawyers’ monopoly has no purpose whatsoever in this day and age. Moreover, given that the Bar Council has always fought for the political and human rights of the people, I believe it should extend this public spirit to conveyancing and other spheres, even if it means less “easy money” for lawyers.

In fact, the real test of our commitment to a particular cause is our willingness to persist even if it hits our pockets, so I say again: the public will surely benefit from an end to the conveyancing monopoly, services will improve and prices will fall. So why can’t we do it?

Contributed by by datuk zaid ibrahim The Star/Asia News Network

> Datuk Zaid Ibrahim, true to his Kelantan roots, is highly passionate about practically everything, hence the name of this column. Having established himself in the legal fraternity, Zaid ventured into politics and has been on both sides of the political divide. The former de facto Law Minister at one time is now a legal consultant but will not hesitate to say his piece on any current issue. He can be reached at zaid.ibrahim@partners-corp.com. The views expressed here are entirely his own.

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It's is our battle: Obama in Malaysia

The biggest takeaway from Barack Obama’s speech was that he really isn’t that interested in solving our domestic issues.

I WAS one of the lucky young leaders who attended the town hall meeting with United States President Barack Obama. It was an incredible experience and I was impressed by his energy, oratory and diplomacy.

However, that town hall meeting left our social and mainstream media buzzing with two issues – the questions raised by the participants and Obama’s quotes on affirmative action in Malaysia.

Many Malaysians viewed the less-than hard-questions asked Obama (such as the meaning of happiness) as a waste of an opportunity. They felt the most powerful man in the world needed to be asked some powerful questions.

I, too, had some serious questions for him. However, I am not, as some critics put it, “disappointed in the future leaders of Asean” for asking theirs.

Four hundred young people attended the town hall meeting but only eight questions were taken. Two were from the social media (curated by moderators and, therefore, bound to be “safe”). The social media questions and three others from the audience came from non-Malaysians, leaving the remaining questions for only three Malaysians.

Might it simply then had been an unfortunate coincidence that Obama happened to pick the three Malaysians, in a sea of raised hands, who chose not to ask about the TPPA (Trans-Pacific Partnership Trade Agreement) or human rights?

Obama is a role model to many. Not all young people are political journalists, critics of his foreign policy or otherwise determined to tembak him.

The Asean participants are my friends and fellow alumni of the US State Departmentsponsored exchange programmes. I know them well enough to know they have a different take to politics than we do.

Malaysians thrive on discussing issues of the day in a kopitiam, at a forum or via Twitter. We’re practically hardwired to talk politics. Contrastingly, my Asean friends are here on a leadership initiative. They’ve attended numerous programmes, conferences and workshops all geared towards helping them become leaders of civil society.

Their focus is to find solutions to poverty, climate change and human trafficking – not to zoom in on policy and trade agreements.

Their questions simply illustrate that they’re more concerned with bettering themselves and their world than turning everything into a debate. This was a town hall for young leaders on leadership. Expect some young (read: naïve) questions on leadership.

At one point during his address, Obama said “Malaysia will not progress if non-Muslims are not given equal opportunities.” I, like many others, took his sound bite to social media.

Many people went further, calling on Obama to pressure our government into reform, to “save us”! And of course we had people labelling Obama a hypocrite, his comment either ridiculous or irrelevant, and condemning those who looked to him as a saviour.

These reactions reminded me that we are once again stuck in our dichotomy of “accept wholesale or reject wholesale”.

I personally think the biggest takeaway from his speech was that he really isn’t that interested in solving our domestic issues.

Many times, he urged us to fight a good fight, but he made it a point to remind us that he has his own problems in America to solve. I couldn’t agree more.

Realistically, the US president has bigger problems to deal with than us.

Idealistically, we shouldn’t need him to help in any major way. My Sejarah textbook taught me that time and again when our rulers were faced with domestic problems, they opened themselves up to colonisation by seeking help from foreigners instead of facing up to their countrymen.

However, I disagree with those who dismiss Obama. Yes, this is an issue we’ve been dealing with for so long that the US president isn’t adding anything substantive to the debate, but that doesn’t make him irrelevant!

It’s like any other old debate such as abortion or creationism. You’re perfectly entitled to roll your eyes and say “Yeah, I’ve heard this one before,” but to some people it’s a big deal to have the leader of the free world publicly say, “I’m on your side.”

Others cite his domestic and foreign policy to label him a hypocrite, but you can agree with what he said yesterday without having to agree to what he said last year or did in Syria.

I highly appreciate the public relations value of the leader of the free world demonstrating an awareness of my cause, but it doesn’t have to follow that I adore him, agree with all his policies or think he’s Superman.

In a week’s time, people will forget what he said. But the fight goes on, right?

So, instead of obsessing over whether he had the right to say what he said, whether it matters that he said what he said, or making idle wishes that someone else had said what he said, let us focus on the more important part of his speech – that it’s our battle.

Open Season by Marina Tan

> Marina Tan won the 2012 English Speaking Union International Public Speaking competition. She is presently studying at Kolej Yayasan UEM and will be going to Yale University in the United States in August to pursue a double major in engineering and economics.

Marina Tan The Star-ESUM Public Speaking Competition 2011



Related post:

Asians can and must think strategically, not to be dominated by the West

Can Asians think? CAN Asian Think is a provocative book written in 1998 by the dean of the Lee Kuan Yew School of Public Policy at the Nat...

Asians can and must think strategically, not to be dominated by the West

Can Asians think?

CAN Asian Think is a provocative book written in 1998 by the dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore, Kishore Mahbubani, a prolific and brilliant thinker.

The book is a combative rebuttal of the idea that the dominant Western (read American) ideas are universalist, arguing that the Rest (of the World) has a lot to teach the West.

Re-reading it after more than 16 years, the questions raised by Mahbubani are as relevant as ever. Personally, I found the title rather condescending – of course Asians can think! The real issue is whether Asians can think strategically in their own interest, or whether they think that the dominant Western philosophy and values are so comfortable and relevant that they simply accept that the West is best.

The intellectual tide is going full circle. Since 1998, we have experienced two full-scale crises – the Asian financial crisis of 1998-1999 in which some Western polemicists gloated over Asian hubris, and the Great Recession of 2007-2009, when even Western intellectuals questioned whether unfettered capitalism was a dead end.

As one Asian leader said, when our teacher stumbles, what does the student do? This strategic question has not been completely answered, or at least the answers are different for different Asian countries.

Now that the West has begun to recover, we are going through a reversal of fortunes. Emerging economies are going to bear the brunt of global adjustment. At least three Asian economies are counted among the Fragile Five (India, Indonesia, Turkey, Brazil and South Africa), and there is considerable worry that China may be going through a hard landing.

President Obama’s trip to Asia was a belated personal confirmation of his “Pivot to East Asia” policy, first articulated in 2012 by then Secretary of State and Presidential wannabe Hillary Clinton. As the United States began to withdraw from Iraq and Afghanistan, and its discovery of shale oil making it less dependent on the Middle East, the Pivot strategy involved strengthening bilateral ties with allies in East Asia, and working relationships with emerging powers, such as China. The immediate unintended consequence of the Pivot policy was the eruption of the Ukraine crisis, whereby Russia took advantage of European weakness and diversion of US attention to effectively bring Crimea back to the Russian sphere of influence.

All of a sudden, the Cold War, defined as the struggle between Big Powers, re-emerged into the global risk equation.

Russian soldiers march at the Red Square in Moscow during a Victory Day parade. Thousands of Russian troops marched in Red Square to mark 69 years since victory in World War II in a show of military might amid tensions in Ukraine following Moscow’s annexation of Crimea. -AFP

The word “pivot” originally arose from a paper “The Geographical Pivot of History”, delivered exactly 110 years ago by Sir Halford Mackinder (1861-1947), then director of the London School of Economics. In his second book in 1919, Mackinder, considered the father of geopolitics and geostrategy theory, enscapsulated his theory of the Heartland in a dictum: “Who rules East Europe commands the Heartland; Who rules the Heartland commands the World Island; Who rules the World Island commands the World.”

The Heartland is of course Central Asia, previously part of the Soviet Union, and the World-Island is the largest landmass of Euroasia, from Atlantic Europe to the East Asian Pacific coast, which commands 50% of the world’s resources. Many of today’s areas of geopolitical risk are at the frontiers of the Heartland – Ukraine, Syria, Afghanistan, Iraq, Iran and the South China Sea.

Mackinder’s innovation was to examine national strategy on a global scale, recognising that the British empire must use geography and strategic policy to its advantage against competing great powers.

Former British colonies understood very well the British strategy of “divide and rule”, playing off one faction against the other, so that Britain could rule a subcontinent like India without expending too much resources. But Britain did not hesitate to apply gunboats or cannon to maintain the strategic balance. Similarly, Britain played off one European power against another, until weakened by two world wars, her former colony, the United States emerged as the global superpower.

Seen from the long lens of history, we are in the second Anglo-Saxon empire, with America being the new Rome. Just as the Roman empire shifted its capital from Rome to Constantinople (now Istanbul) in the 20th century, power shifted westward from London to Washington DC.

In the 20th century, two island economies, Britain and Japan, played leading roles in intervening in the continents of Europe and Asia through maritime power, but by the 21st century, air and technological power through size and scale changed the game in favour of the United States. The United States is a continental economy defended by two oceans, the Pacific Ocean and the Atlantic, without a military rival within the Americas.

In contrast, Asia has been historically riven by war and territorial disputes.

In his new book, the Revenge of Geography, geostrategist Robert Kaplan argued how politics and warfare were determined throughout history largely by geography.

Even though the arrival of air travel and Internet suggest that the world may become borderless, the reality is that the world is becoming more and more crowded.

When the First World War broke out in 1914, the global population was only 1.7 billion, with a death count of 16 million. By the Second World War, the death count reached as high as 85 million, when world population was only 2.3 billion.

The next World War will be fought over water and energy resources, because there are limits to natural resources even as the global population exceeds 7 billion, going towards 9 billion by 2030.

For the world to avoid global conflict will require great skills and mutual understanding, because the geopolitical risks of political miscalculation and accidents are extremely high in an age of rising tensions due to inequality, chauvinism, religious and ethnic polarisation. As an old African saying goes, when elephants fight, the grass gets trampled. In the next big fight between the nuclear powers, there will be no winners.

Now that is something that not just Asians must seriously think about.

 - Contributed by Tan Sri Andrew Sheng

Tan Sri Andrew Sheng is Distinguished Fellow of the Fung Global Institute. The views expressed are entirely the writer's own.