FOR a lawyer who says he is "red-hot for anything digital", Brett Hayton has a bleak prediction for next month's launch of electronic conveyancing in Victoria.
"It will be a shemozzle," he said.
Mr Hayton said there was very little chance of a flood of electronic property deals when the new pilot system went live on November 16. The reason was that the numbers were stacked against the new system.
Mr Hayton's assessment is not based on a distaste for technology. As well as running Hayton Kosky Lawyers in Bentleigh, Victoria, he has spent years developing his own web-based system for handling property transactions.
His experience with that system, known as 247legal.com.au, has informed his assessment of the Victorian Government's plans.
"There are problems with the government system," he said.
"They must be looking at things over generations.
"It's like they have adopted the view 'build it and they will come'."
In order to make electronic conveyancing a reality, he said, each transaction required four key players - two banks and two lawyers.
Non-lawyer conveyancers might take the place of solicitors in some transactions, but that does not affect his argument.
The problem in Victoria, as he sees it, is that the big banks have withdrawn from the system and there is no obligation on solicitors to switch to the electronic system.
"So let's assume that 50 per cent of lawyers sign up for it. That means a maximum of only one in four transactions is going to be electronic.
"Three-quarters of them will still be on paper - and that's the biggest drawback to the system."
Mr Hayton might even have overestimated the take-up rate among solicitors. Two weeks ago, Law Institute of Victoria chief executive Michael Brett Young warned the state's solicitors that the institute "cannot recommend that its members enter the scheme".
He issued that warning after the Legal Practitioners Liability Committee raised concerns about the possible risks to lawyers who took part.
Talks aimed at resolving the committee's concerns are continuing. But a spokeswoman for the institute said yesterday that nothing had changed.
Mr Hayton, however, said safety was not the main issue with the new system. He was more concerned about the possibility that Victoria's switch to electronic conveyancing might be about to result in two separate systems - paper and electronic.
He is also concerned that other states might adopt this part of the Victoria model - complicating conveyancing by allowing two separate systems to operate side by side in every state. "I once raised this issue at a meeting and asked how I was to know whether a particular transaction was going to be electronic or paper. Do I ring around?
"There was no answer.
"I don't want to see a 50-50 system. It needs to be made compulsory to use the new system and that needs to happen sooner rather than later to avoid mucking around with dual systems.
"The banks have a cogent view. They deal nationally. They don't care where a transaction is settled, but they deal with seven systems now and they don't want to deal with 14."
If these concerns are resolved, he believes firms that embrace electronic conveyancing will eventually have a significant cost advantage over their paper-based competitors.
Eventually, that will place them on the winning side of the rationalisation that he believes will flow through the industry.
Chris Merritt | October 26, 2007
The Australian
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