In the circumstances as set out I think that the solicitor is pretty much spot on. For title to be reconstructed secondary evidence is needed. Ideally it will be a copy of the conveyance produced by a conveyancer from his file accompanied by a statutory declaration confirming the firm acted and investigated title. It does not look as if that is going to be forthcoming in this case. However, enquiry can be made to see if the files of the firm which acted were handed over to a successor firm or if they are in the custody of a retired partner of the firm. If it is known who acted for the developer enquiry can be made of that firm. Failing that you need something which shows the deeds were sent to your parents, like a letter from the solicitor sending them, or some evidence of money changing hands. Since the property is vacant land other evidence such as would be available if it were a house, like rates and electricity bills, is not going to be around. Further, since the land has not been occupied, no independent third party can give supporting evidence of possession. Contacting the developer clearly involves a risk, but if you apply for registration you are probably going to have to say who the land was bought from and the Land Registry will inevitably give them notice of the application.
If further enquiry proves fruitless, then what you need to do, bearing in mind that an applicant for first registration needs to confirm he is in possession, that is to say in effective control of the land, is the following:
1. Clear the land and start to cultivate it. This is necessary because the LR will send their surveyor to inspect the land. Although your application will not be based on adverse possession, it will treated more or less as if it is.
2. Once you are up and running, get your parents to transfer the land to you and make a statutory declaration setting out the history of the purchase and how the deeds came to be lost or destroyed.
3. Submit your application for first registration with the statutory declaration and such evidence as you have been able to gather.
It is wise to employ a lawyer to prepare everything.
There are three possible outcomes:
(a) The land gets registered with absolute title, in which case you rejoice.
(b) The land gets registered with possessory title, in which case you rejoice, but not with vintage champagne.
(c) The application is rejected, which will be disappointing, but not an occasion for being downhearted. Depending on what the LR says and your lawyer's advice, you consider whether to ask for the matter to be reconsidered or appeal formally. If the reconsideration or any appeal is unsuccessful, your main problem is not so much that you are vulnerable to a claim, but that you will not have a good and marketable title if you want to sell. However, apart from the title derived from your parents you will have title by virtue of being in possession. Anyone claiming the land must show a better title and if they have no documentary evidence of title your earlier possession prevails. Fast forward fifteen years. What you then have is the transfer from your parents which forms a good root of title. That, coupled with your possession, gives you a good enough title to apply to be registered with absolute title. However the transfer will only be a good root of title if you apply for registration within two months of it being executed. This is because of section 7(1) of the Land Registration Act 2002 provides that "if the requirement of registration is not complied with, the transfer, grant or creation becomes void as regards the transfer, grant or creation of a legal estate." If you apply you comply with the requirement for registration even if your application is rejected. (The Act does not say that, but I think it has to be implicit.) Obviously you keep evidence that the application was made.