OF THE LAW SOCIETY OF SCOTLAND - The Journal Online

Journal
Risk Management
Omissions cause
most claims
This month Alistair Sim considers a series of case studies which illustrate
a variety of risk management points. In most of the case studies, problems have been
created by an omission which call for a particular risk management approach.
May 2002 Volume 47 No 5 44
No right of access
J was the proud owner of a classic Triumph TR4.The car
was his pride and joy and it was only ever taken out of
the garage in perfect weather conditions.
As a result, when J purchased a flat in a recently
converted house, it was the substantial garage at the
rear of the house that had been the deciding factor. It
was therefore a major problem when J received a stern
letter pointing out that J had no right to drive along the
track down the side of the house leading to the garage
at the rear of the building.
The owner of the track is offering J the opportunity to
acquire it at a price of £10,000. J is particularly aggrieved
about the whole situation in view of the fact that the
garage was the main reason for buying the flat.
How is this situation likely to have arisen? How could
the situation have been avoided?
Most claims arise as a result of omissions. In this case,
there may have been an omission to examine the title
properly or an omission to provide for an express right
of vehicular access to the garage or an omission to
establish that an express right of access was required. A
checklist approach might assist to prompt consideration
of all the relevant issues in taking instructions from the
client, in examining title and in drafting documentation.
Retention of clients’ documents
F & Co received a letter from a client P with whom
there had been no contact for several years. P was
asking for papers which he said F & Co had been
holding for him in safekeeping.
One of the partners in F & Co was fairly sure the
papers had been forwarded to P a long time ago. He
was pretty sure about this because he remembered
handing over the documents personally when P called
at F & Co’s offices.
The file was retrieved from archival storage but it
revealed no record of the meeting with P or the fact
that the documents had been handed over.
Nevertheless, the solicitor was sufficiently confident of
his recollection that he wrote to P and said that the
documents were already in P’s possession.
That prompted a threatening letter from P accusing F &
Co of having lost the documents and intimating a claim
for losses that P might suffer as a consequence.
F & Co were in a weak position because their records
(and P’s) confirmed that the documentation had been in
F & Co’s possession; there was nothing to verify that the
documentation had been returned; there was certainly
no receipt from the client confirming that he had
received the documentation back from F & Co.
How would you avoid finding yourself in this position?
When original documents are received and returned,
ideally this should be recorded both on the file, perhaps
also in a central register. While files may be destroyed
after a retention period, if a central register is
maintained longer term, that will provide a record of
documents received and returned/delivered/destroyed.
Best of all, get signed acknowledgments from clients.
Terms of engagement/Non-engagement
Firm X acted for A in a successful medical negligence
claim. Some months after settlement of that matter, Firm
X received a letter from another firm of solicitors
alleging that Firm X had allowed a claim for
discrimination to become time barred. On checking their
file, Mr X of Firm X was reminded that the issue of a
possible discrimination claim had arisen incidentally
during the course of a discussion concerning the medical
negligence claim. Mr X was quite clear that he had never
undertaken to act for A in the discrimination matter.
How would you have avoided finding yourself in this
situation? If Mr X was so clear in his own mind that he
was not acting for A in any separate discrimination claim,
why did he not communicate the position clearly to A?
For the sake of clarity and his own protection, Mr X
might have issued a non-engagement letter in relation to
the discrimination matter.
Partnership liabilities
Firm Z acted for C in connection with his departure
from the partnership of ABC & Co. This was an
extremely acrimonious bust up and there were