Risk management

Who's got my certificates?Out of the blue, Mehmet received a letter from a former client by the name of Mrs G.

She said Mehmet's firm was holding original certificates belonging to her, and she wanted them back.

They were essential if she was to establish her entitlement to funds being held by a third party.

Without them, the letter warned, her prospects of recovering the money were severely limited.Mehmet was troubled by the letter, because he could distinctly remember returning the certificates to Mrs G.

He had delivered them personally by hand - although it was a long time ago, he remembered the occasion clearly.

Mehmet checked his records and noted that the file was in storage.

He asked his secretary to have it retrieved.

When the file arrived back at his office, he searched through it and, sure enough, there was no sign of the certificates.

He wrote to Mrs G and explained that they had already been returned.Mrs G's next letter came as a shock.

Framed in the most intemperate terms, it insisted that Mehmet had lost the certificates.

Mrs G demanded that a full search be made of Mehmet's offices and that his firm should account to her for any money she might lose should she be unable to produce the certificates to the third party.Mehmet searched the entire office.

There was no sign of the documents.

He sent a memo to the firm's trainees and filing clerks asking them to give up a few hours on Saturday looking for the missing papers.

They spent the whole day turning the office upside down - but there was no trace of Mrs G's certificates.Mehmet notified the matter to his professional indemnity insurers.

He told them that any claim from Mrs G would be likely to fail, arguing that any court would find his evidence credible because of his standing in the community.

He added that - from his experience - Mrs G would make a poor witness.The insurers examined Mehmet's file.

They said it would be difficult to defeat a claim by Mrs G.

The file revealed that the certificates had once been held by the firm.

But there was no note on the file recording the return of the papers to Mrs G.

Nor was there any signed receipt from the client confirming that the certificates had been handed back.The insurer ended up paying the claim.

To avoid finding yourself in a similar position, make sure that when original documents are received and returned, this is recorded both on the file and in a central register.

Files are often destroyed after seven years; the central register should be kept for longer to ensure the evidence is retained.Best of all, get a signed acknowledgement from the clientl For information on claims prevention, contact Richard Gerrard at St Paul International, tel: 020 7645 6800.