Joint Committee on Justice, Defence and Equality debate -
Wednesday, 1 Oct 2014

The Benefits of e-Conveyancing: Discussion (Resumed)

Chairman

We are now in public session. Please note that the proceedings of this committee are being carried live on the Oireachtas television channel, a new innovation that we are happy about and that is growing more and more popular. It is going right up in the ratings. After today, it will be at the top. I have been asked to remind members to switch off all mobile telephones or to put them in flight mode, as they interfere with the sound system if they are active. It is not enough just to put them on silent.

The purpose of this part of the meeting is to resume our discussion on the benefits of an important topic, namely, e-conveyancing. We are joined by representatives from the Banking and Payments Federation Ireland, BPFI, formerly the Irish Banking Federation, IBF; the Law Society of Ireland; and the organisation being formed from the merger of the Property Registration Authority, Ordnance Survey Ireland and the Valuation Office, to be known as Tailte Éireann. On behalf of the committee, I welcome all of the representatives to the meeting and thank them for their attendance to discuss this interesting, exciting and important topic, which was first considered by the committee in June. We are resuming our discussion today, as the BPFI was unavoidably absent previously. In order to hear the opinions of all stakeholders, this meeting has been convened.

As such, the format of the meeting will see the BPFI given an opportunity to make a brief opening statement of approximately five minutes, after which I will invite the other guests to introduce themselves, briefly remind the committee of the main points made previously and notify us of any development that has occurred in the meantime. A questions and answers session with members will follow. I understand that Teranet Incorporated, one of the participants at the June meeting, was also invited. As it is based in Canada, attending today was not possible. However, it has assured us that it will be watching live on the web cast.

Before we begin, I draw witnesses' attention to the privilege situation. They should note that they are protected by absolute privilege in respect of the evidence they are to give to the committee. However, if they are directed by the committee to cease giving evidence in respect of a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members should also be aware that, under the salient rulings of the Chair, they should not comment on, criticise or make charges against a person outside the Houses or any official by name or in such a way as to make him or her identifiable.

I invite Mr. Brett to make his opening statement.

Mr. Noel Brett

I thank the committee for inviting the BPFI to attend this meeting and to make a brief opening statement. As requested, I have made a written submission in advance. I apologise for not being in a position to attend the committee's meeting on 25 June, as it clashed with the IBF main council meeting and I was unable to reschedule with that notice. I am pleased to be in attendance today to answer whatever questions the committee may wish to ask.

The BPFI is a new organisation created following the merger of the IBF and the Irish Payment Services Organisation, IPSO, in September 2014. It is a membership organisation representing more than 70 members in the banking and payments industry. I will open by definitively stating that member banks are fully committed to the introduction of e-conveyancing. My members will make the necessary investment in internal bank systems, work flows and staffing to enable lenders to participate fully in e-conveyancing. I want to be unequivocal about their preparedness, willingness and desire to be involved.

Until recently, a key sticking point was the issue of mandated use by all parties. Banks are keen for there to be a mandatory transition date to the new e-conveyancing system and for the paper-based system to be phased out. It is not feasible to introduce e-conveyancing while retaining the old paper-based system with both running in tandem. When e-conveyancing goes live at a given date following a transition period, there should be mandatory participation in the process by everyone. The committee may wish to consider whether there is any potential benefit in legislation for the mandatory use of e-conveyancing by all parties.

A number of issues can be addressed bilaterally by my organisation and the Law Society of Ireland under a recently agreed memorandum of understanding. These include the holding of funds and the security of same, service levels and the integrity and resilience of the ICT systems that underpin e-conveyancing.

With the Law Society, we can progress these matters.

We note that the Government has included e-conveyancing in its Construction 2020 strategy. It is my understanding that the Government has tasked the Department of Justice and Equality with reviewing and reporting on the steps required to deliver a system of e-conveyancing, including the resource implications and the timelines for delivery. The BPFI will engage proactively in support of this action. In parallel, we will work with the Law Society of Ireland to ensure that processes and operational issues from a lender's perspective are addressed in a timely manner.

As outlined in my submission, the introduction of e-conveyancing is timely and will deliver better services to the public, enhance security and reduce risk and deficiencies for all stakeholders, both public and private. BPFI members are committed to participating and will engage proactively with all stakeholders and parties.

I thank the committee for affording me the opportunity to attend this meeting and I am happy to answer whatever questions it wishes to put to me.

Chairman

I thank Mr. Brett. It sounds like progress has been made and there was a lot of good news in his contribution. Does Mr. Dorgan wish to comment? If not, does anyone else wish to remind the committee of what was stated last June?

Mr. John O'Sullivan

I thank the committee for the opportunity to make some brief opening remarks and to take part in this discussion on e-conveyancing. I do so as the chief executive-designate of Tailte Éireann, the new organisation to be established through the merger of the Property Registration Authority, Ordnance Survey Ireland and the Valuation Office. I am accompanied by Mr. Frank Treacy, Mr. Greg McDermott and Mr. Peter McHugh of the Property Registration Authority. We look forward to assisting the committee in its consideration of the subject.

As I outlined in June, it is envisaged that Tailte Éireann will, when established, be responsible for providing the authoritative national property registration system, national mapping and surveying infrastructure and State property valuation service. In that capacity, it will be the primary source of property information and location-based data in the State and will assume a lead role in the development and delivery of land information services.

One of the roles envisaged for Tailte is in developing and leading the implementation of a national spatial data infrastructure, NSDI. This will result in Tailte co-ordinating the use of such information across government and establishing and managing the standards behind such information. The NSDI will thus facilitate better use of location-based information to support evidence-based decision making across the relevant government sectors. Accordingly, the development and implementation of an NSDI by Tailte Éireann is potentially a significant and welcome development for e-conveyancing.

I note the commitment to e-conveyancing in the Government's Construction 2020 report, which concluded that "a system of eConveyancing which harnesses modern technology to assist in the timely transfer of property ownership would provide a more modern, efficient, cost effective and secure system to support transactions in the property market in the future". However, Construction 2020 also acknowledges that "moving to a full eConveyancing system will require a number of further elements over and above existing and planned developments to be put in place". It identifies, in particular, the need to provide for the secure transmission of communications, the management and disbursement of funds between parties and the creation and management of digital signatures.

Measure No. 73 in the Construction 2020 report deals specifically with e-conveyancing. It states: "In collaboration with key stakeholders (the legal profession and the banking sector) the Strategy will review and report on the steps required to deliver a system of eConveyancing in Ireland, including the resource implications and timeframes for delivery." I am advised by the Department of Justice and Equality that, in order to advance this matter, it intends to convene a working group to conduct the proposed review of e-conveyancing and to report to the Government thereafter. It is anticipated that the working group will be convened during the final quarter of 2014.

Developments towards e-conveyancing are well aligned with the mission and vision that have been articulated for Tailte Éireann and the new organisation will be keen to play a central role in the project. In my submission, I included some briefing material in appendices for the attention of committee members.

Chairman

I thank Mr. O'Sullivan.

Mr. Patrick Dorgan

I did not understand that the Chairman was seeking an opening statement from us a few minutes ago. The Law Society is glad for the continuing interest that has been shown by the committee in e-conveyancing.

I am joined today by my colleague, Dr. Gabriel Brennan. Most of the members here heard on the last occasion about what we see as the many benefits of e-conveyancing for the consumer and all other players in this game. I do not propose to go through the opening statement we made on the last occasion. All of those materials are available to the committee.

The committee may recall that on the last occasion the Law Society felt that notwithstanding our engagement with all the major players, including Táilte Éireann and the banks over many years, and notwithstanding that significant progress had been made at all levels, we had reached a point with the banks where there was an unwillingness to commit fully to this project. I think I said that to the committee. I am glad to say that in the interval between the last meeting and today there has been engagement between the Law Society and the banks at the highest level about this project and we are delighted to hear Mr. Brett’s comments today to the effect that the banks are fully committed to the project. We think a result has been achieved. We have had very good dialogue and communication with Mr. Brett and his organisation and we look for the ongoing support and interest of this committee to make sure there are no further delays in having this implemented as quickly as possible.

Chairman

Before I invite my colleagues to speak, would Mr. Dorgan tell me when this might be up and running? I know the Department is establishing a working group.

Dr. Gabriel Brennan

When Mr. Barnhart was here on the last occasion, he indicated a timeframe of approximately two years for process development. Some of that work has been done but we may need to go back and revalidate it. Then there will be a six month pilot. The timeframe will be effectively two and a half years from now.

Senator Ivana Bacik

I thank the witnesses for coming back to the committee. It is particularly good to hear from the bankers this time because, as Mr. Dorgan said, we did hear there was a concern about buy-in and engagement on that side while the Law Society was keen to promote the idea and we on the committee felt it was a positive development. The Law Reform Commission also seemed to endorse it very positively.

Given the timeframe that Dr. Brennan has outlined, is there anything we can do as legislators to facilitate its more speedy introduction or to ensure there are no further obstacles?

Mr. Patrick Dorgan

In the paper we submitted on the last occasion we identified as one of the advantages of the proposed system that it does not require a significant layer of legislative involvement. There are elements such as, for example, digital signatures, which will require changes to statutory instruments. One of the points of agreement which we very quickly reached with the Irish Banking Federation was mandating use. We are very interested to hear that this had been a major worry for the bankers. It is one we share. It was also shared by our proposed partners, Teranet, because the big question is if we build it, will they come? All the stakeholders may return to the committee to say they would like an Act or something to say that there is now a working system and we want to switch off the old system in six months’ time. If legislative interference was needed for that, we would be very grateful for that assistance.

Senator Ivana Bacik

At the meeting in June several of us asked about security. This seems to be very positive for consumers, which was our main concern but is there an issue about conveying information on the Internet? Will the data be encrypted?

Mr. Noel Brett

They are the issues we will want to work out bilaterally with the Law Society. The system needs to be resilient. We need to make sure that if there are service or system outages, there is a quick process to get it back and we are not depending on people elsewhere to sort it out. We note in Teranet’s proposal that its system will be based in Ireland. That has operational benefits, as well as security and data benefits.

When I talk about system resilience, integrity, recoverability and service levels, that is specifically what I am referring to. That is best dealt with bilaterally in the working group that we have agreed.

In terms of the mandatory piece, I would echo what Mr. Dorgan has said. My predecessors set that out in 2013 as one of their major concerns. If we need to come back for legislation after we have done some work across all of the agencies, it would be helpful that the committee would be receptive to that.

Chairman

Definitely.

Deputy Pádraig Mac Lochlainn

What I welcome about this is the levels of efficiency. It has been a protracted process, it is an archaic system and we want to modernise it.

The concerns include cyber attacks and data protection. Breaches would be devastating. I want to get more of a sense of the lessons to be learned from the other common law jurisdictions which have implemented this. Without a paper trail, what security can one have?

There are citizens who would not be as averse to using technology as others. In terms of equality, this is a key function of society. Would there be an alternative? Would it have to be electronic? How would there be protection for the rights of those who are not as proficient as their neighbour?

Chairman

Who wants to take that?

Mr. Patrick Dorgan

I will start. In answer to the second question to deal with the citizens who would not perhaps have access to technology, nothing in the proposed system would require that citizens as such would have that access. The software and computers involved would be in the solicitor's office. There would certainly be a point at which the citizen would be required to interface that system in terms of signing a document and that falls into the space of a digital signature which, I understand, is a separate Government process which will have to be tackled as such. However, there should not be any reason for a citizen who, for one reason or another, does not have the facility to access technology not to be able to participate fully in this system.

On security, on the last occasion I was taken by a phrase of Senator Bacik who identified that what we are proposing is a change in process rather than substance. Effectively, we will do the same as we do today, but electronically. The back end of this, from the citizens' point of view, is knowing that their ownership is registered safe and secure, and from the lenders' point of view, that their mortgage is registered safe and secure. Nothing in this system will alter the current position which is that we will eventually get to the point where the PRA element of Tailte will do what it already does, which is safeguarding the State guarantee on property title. We will merely feed up to the front door of Tailte but, after that, it will be its responsibility, as it is currently. There is nothing in this that will create a potential for citizens to be compromised by our system. Our system will merely bring them to the door of the Land Registry and after that, Mr. O'Sullivan's organisation will take over, as it currently does very well.

Mr. Noel Brett

From a lender's point of view, there are typically four points of contact, namely, at the point of mortgage approval, approval of the contract for sale and title, the release of funds in closing and the registration of the charge. Those are interfaces with other agencies and solicitors rather than directly with members of the public. What this system does is give the efficiency and put speed into that process. From our point of view, there is not an issue in terms of the public.

Dr. Gabriel Brennan

I was going to make the same point as Mr. Brett, namely, the major electronification of the process is between stakeholders as opposed to directly with the consumer.

We share the concerns about cyber attacks. We share all these concerns about security and data protection and we have done some work on that. Obviously, there is further work to be done. One of the major advantages of going with an international partner such as Teranet, which works with the Ontario Government and which has been given a 50-year licence by the Ontario Government to extend its service recently, is that the company works in that space already with sensitive public data and it has never had a security breach.

Obviously we are keen to ensure that kind of reputation is maintained with the system here.

Deputy Pádraig Mac Lochlainn

I am concerned about the word "never". How can one guarantee the citizen, in the unlikely event of a cyber attack and breakthrough by an anonymous organisation, that there is some type of paper trail?

I shall return to my earlier point. I appreciate that the citizen does not use the technology. How can the organisation reassure us? I use credit cards for transactions and online transactions because I have confidence in the security of these systems. How can we convey confidence to somebody who does not engage in such transactions, perhaps people from an older generation? Is the process explained and guaranteed? Is there a backup or fallback in the unlikely event of a data cyber attack?

Dr. Gabriel Brennan

To date, the company has never had a security breach. However, the Deputy's point was well made. Obviously we share his concerns. An IT system can fail in the same way that somebody can break into somebody's house and steal title documents or a squatter can take possession. Even having something on paper is not an absolute secure method of guaranteeing ownership or that data will be protected. The aim is to protect to the best possible way in terms of system design, making sure there is investment in security and that it is maintained on an ongoing basis. The Deputy is right that security is not to be taken lightly.

One of the points I made on the last occasion was that we want to reduce risks, in terms of building this system, but we do not want to inadvertently create new risks. That is something that will need to be looked at in more detail.

Deputy Anne Ferris

I thank the witnesses who returned again today. I also welcome Mr. Brett from the federation. I was one of the most vocal people to express concern that nobody from the lenders' group attended our meeting in June. It is quite well known that I do not have a lot of time for some of the banks due to the way they treat people with mortgage difficulties but that is another story.

Chairman

I ask the Deputy to stick to the script.

Deputy Anne Ferris

I will but I never fail to take the opportunity to comment on them.

Chairman

Let us get back to discussing the economy.

Deputy Anne Ferris

I am delighted Mr. Brett is here today. We have read his submission and are pleased he is completely on board with the idea of e-conveyancing. It is a win-win situation for everybody into the future. I wish him very well.

The committee is here, as Mr. Dorgan has said, if anybody needs assistance. Perhaps the committee will examine the matter in a year's time and get an update on how things are going.

Chairman

Two and a half years seems like a very long time. Will it take two and a half years? Am I wrong about that? Is two and a half years a short time?

Dr. Gabriel Brennan

I wish to clarify that the comments were made in the environment we had in June but now there is clearer support from all the stakeholders involved. One of the things that we will immediately look at is how short the period could be and how quickly we could do the work.

Chairman

Does that mean it might be a lot shorter?

Dr. Gabriel Brennan

Yes.

Chairman

Dr. Brennan's documentation stated that it will reduce transaction time, reduce costs, reduce service delays, improve transparency of the process, reduce risk, meet the demand for electronic service delivery, increase consumer confidence in the process and so on. That is a win-win situation, as Deputy Ferris has said. We are anxious that the initiative is moved on as quickly as possible and will be active well within the two and a half years, if possible. Deputy Ferris suggested that we invite everybody to return here in 12 months' time to give a progress report. Her suggestion might be of interest.

I am delighted the lenders are here today and understand they could not attend on the last day. Everyone now seems to be heading in the same direction. I wish the project well on behalf of myself and my colleagues here. We will do anything that we can to help as a committee, and an Oireachtas, because this initiative is a win-win. People have rolled up their sleeves but I urge them to roll them up further in order to get the initiative moving. I thank everyone for being here today.

The joint committee adjourned at 3.05 p.m. until 10 a.m. on Wednesday, 8 October 2014.