GOOD PRACTICE

Conduct and service

Double jeopardy?

One of the most frequent causes of complaints across the spectrum of the different types of legal work is the failure of solicitors actively to keep their clients informed.

If clients have to keep asking for updates, because none is otherwise forthcoming, this usually results in complaints.

Couple that with the issue that causes more complaints in conveyancing matters than any other - inaccurate accounting - and the outcome can be confidently predicted.

Such were the unhappy circumstances of a complaint that was recently considered by the Law Society's adjudication panel on an appeal from an adjudicator's decision.

The immediate cause of the original complaint was, as so often is the case, something for which the solicitors were not to blame, but because they had not properly explained the circumstances to the client, he thought they were.

And, when this caused him to make his complaint, the other, justified complaints, were added in for good measure.

The immediate cause of complaint was the fact that the solicitor had written to the client some two months after completion of the purchase of his house, asking for more money.

This was not the firm's fault - the delay was due to the builder getting his sums wrong - but the solicitors did not explain this, just as they failed to explain anything else during the course of the matter.

The client complained and then added on the other complaints about the solicitors' failure to advise throughout, and the fact that the solicitor had not asked the client to sign the deeds until some weeks after completion.

The adjudicator awarded the client 150 compensation and the client appealed.

The panel agreed the amount was too low and increased it by 100.

Had the solicitors taken the trouble to explain properly the request for additional funds, which were not of a significant amount, not only could they have probably avoided the complaint and the subsequent award, but they could also have saved themselves the time spent in dealing with it.

Although the client was clearly unhappy at the service he was afforded, the signs were that he did not want to make a fuss about it - until that final straw broke the camel's back.

Every case before the adjudication panel is decided on its individual facts.

These case studies are for illustration only and should not be treated as precedents.

LawyerlineFacing a service complaint? Need advice on how to handle it? Contact Mike Frith at LAWYERLINE, the support service offered by the Office for the Supervision of Solicitors, tel: 0870 606 2588.

Risk management

What constitutes a circumstance?

A circumstance is anything which may give rise to a claim.

It could, for example, mean an e-mail which has not been received, erroneous wording within a document, or a missed deadline.

If solicitors discover that an error has been made then they are obliged to inform their clients.

It is often the case that because a mistake is minimal that a solicitor will believe it is not necessary to inform the broker or insurer.

This belief is often compounded in the mind of a solicitor if, at the time of informing the client of the error, the client does not seem unduly worried.

However, if something does go wrong later, then this slight mistake could be held out as part of the evidence against the practice.

What seemed a tiny error, could be used in conjunction with other small mistakes as proof of negligence on the part of the practice.

Any allegation of negligence made against a firm, however spurious, also constitutes a circumstance and must be notified.

Another reason solicitors do not inform their brokers or insurers of a circumstance is because they think that the number of circumstances reported will impact adversely on the cost of their premium rates.

On the whole, an insurer would rather know about all circumstances regardless of whether they go on to become an actual claim.

A law firm which reports all circumstances is more likely to be perceived as well-organised with good procedures for checking errors, as opposed to a higher risk.

It is the practices which do not notify their insurers of circumstances, and then get hit with claims, which are more likely to be penalised.

As far as an insurer is concerned, showing that you are aware of what might give rise to a claim proves that not only do you have good risk management procedures in place but that you fully understand and utilise them.

Additionally, your insurer may be able to work with you to rectify any problem and prevent a future claim.

Once you are aware that there has been an error somewhere in the work you are doing, and once you have informed the client, it is imperative that you report the circumstance to your broker, if you use one, or your insurer directly.

You must report the circumstance as soon as you become aware of it.

Failure to report a circumstance could result in the practice seeming guilty of deliberate concealment.

If you use a broker then you will be sent a claim form to complete.

Once this is done it needs to be sent back to the broker who will liaise with the insurer on your behalf.

If you do not use a broker then you will have to inform the insurer yourself.

Most insurance companies need to be notified in writing, but it might be helpful to telephone them first, to determine exactly what you need to do, and work out the correct timing.

Therefore, the best advice is to err on the side of caution.

An insurer would far rather know about any potential claims which may come in than be informed only once a claim is being made against a practice.

This column was prepared by the Alexander Forbes Professions risk management team.

QUESTION OF ETHICS

Q I have been approached by a prospective client who thinks he may have a negligence claim against another firm.

I approached that firm for the relevant file so that I can decide whether to accept the retainer.

While they accept that there are no outstanding costs, the other solicitors think that the possibility of a claim entitles them to retain the original file, although they will permit inspection and provide copies of specific papers on the file.

Is this right?

A No.

A client is entitled to the papers on his file which belong to him unless the solicitor can exercise a lien for unpaid costs.

The fact that the client is alleging negligence makes no difference, although, in that event the solicitor would be wise to take copies of appropriate papers before releasing the originals.

Such copying would be at the solicitors' expense, because it is being done for their benefit.

Of course, the solicitor should also be liaising with his qualifying insurers.

Please note

The Solicitors' Publicity Code 2001 replaced the Solicitors' Publicity Code 1990 on

16 November 2001.

It also repealed practice rule 11 (Names used by a firm).

The new Code requires all firms to put 'regulated by the Law Society' on their notepaper.

Practitioners can postpone this until 1 January 2003, but only if they continue to comply with the 1990 code and the old practice rule 11.

Question of ethics is compiled by the Law Society's professional ethics guidance team.

Send questions for publication to Austin O'Malley, the Law Society, Ipsley Court, Berrington Close, Redditch B98 0TD; DX 19114 Redditch; tel: 020 7242 1222.