Risk management

Clarify retainersIt is important to adopt a structured approach when accepting instructions to act for a client.

Solicitors are collators of information and providers of advice to clients.

Solicitors must be sure that their clients understand this, but they will only do so if the fact is clearly and effectively communicated to them.

How should this be done? Via the retainer letter, which is the foundation of the relationship between solicitor and client.

It is an essential risk management tool which is often overlooked by solicitors.

The letter of retainer states what the solicitor will and will not do on behalf of the client.

For example, if you will not be providing tax advice in a conveyancing transaction, then say so, and advise the client of the need to seek the services of an accountant.

If the firm of solicitors provides options to the client in its retainer letter, such as carrying out an environmental land search, it must also warn the client of the implications of such a search not being undertaken should the land subsequently prove to be contaminated.The temptation is always there, especially in a pressurised transaction, to drift outside the agreed retainer, by going the 'extra mile' for the client.

Clients frequently ask solicitors: 'what do you think I should do?' This question has to be answered by the client.

The solicitor can give an opinion, but should make sure that the client is aware that it is only an opinion, and not an assurance or definitive advice.

Do not be tempted into offering advice outside your area of expertise, or even an opinion; this may be interpreted as definitive advice upon which the client may act to his or her detriment.

A negligence claim may soon follow.

In such situations refer the client to the appropriate expert either internally within the firm, or externally, such as an accountant or surveyor.

By drifting outside your retainer you are extending your duty of care, and will be expected to achieve at least the standard of a reasonably competent solicitor - no excuses!

Whenever advice, or indeed important information, is given to the client, this should be recorded in a letter or an attendance note.

If at any stage the terms of the retainer are altered, again confirm this in writing to the client.Consider also the use of the non-retainer letter.

If you decline to act or advise on a particular matter, write and tell the client so he or she is clear that you will not be progressing matters.Finally, always consider terminating the retainer at the end of the transaction.

l For further information on claims prevention, contact the risk management team at St Paul International, tel: 020 7645 6920.