Risk management

Delegate don't abdicateMike was the commercial property partner in a large firm of solicitors.

He received instructions from Lawrence, a director of a property investment company, to draw up a lease of commercial premises.

Mike had acted for the company many times.

The instructions were detailed and included a schedule of terms that had been agreed with the tenant.

Included in the terms was a provision that the lease should include a break clause, exercisable by the landlord at any time within the first two years of the term, upon giving six months notice.

Straightforward enough thought Mike, so he handed the file to his newly qualified assistant Robert.

'This is urgent Robert, straight forward enough, get it done asap, Lawrence is a good client, he won't give you any trouble.'

That was the extent of the instructions given to Robert, who was under considerable pressure himself due to the number of straightforward files that Mike and other more senior members of the team were passing to him.

He put the file to one side intending to deal with it as soon as possible.

Nothing happened.

Concerned, Lawrence telephoned Mike and expressed his dissatisfaction with the delay.

Mike was straight on to Robert, 'Why the delay, it's a straightforward enough transaction, get it finalised, I don't want another conversation with Mike trying to calm him down.' Robert immediately prepared a draft, sent it to the tenants' solicitor and arranged a meeting with them the next day to get the draft approved.

No problem there, the tenant and his solicitor attended the meeting and the draft was approved with only a couple of small amendments.

The lease was sent by courier to Lawrence who arranged for it to be sealed and signed by authorised signatories as he was away on business.

Completion took place.

No problem, until Robert was scouring the lease nine months later, no matter how hard he looked the break clause was not there.

It had been missed out.

'You will have to explain this to Lawrence,' said Mike, 'it's your fault.' But was it?

Had Mike's department had a structured approach to delegation the claim may have been avoided.

The following steps at least should have been followed when the file was handed to Lawrence:l His work load should have been checked to protect him from undue pressurel Clear instructions should have been given as to what needed to be done and by whenl Further enquiry should have been made when the client complained of delayl His work should have been supervised and the final draft checked to ensure that it complied with the clear instructions given by the client.

This column was prepared by The St.

Paul Risk Management Team