Risk management

Learn from mistakesMarket research can be expensive.

Yet many firms have an untapped supply of marketing data - the claims and complaints made against them.

These are often ignored, but they can provide vital information about how a firm could improve its service to clients.The firm need not even have made a mistake.

A claim that is repudiated can still provide useful insights.All too often, firms are more concerned with seeing off a claim or complaint as soon as possible - or ignoring it totally, preferring to bury their collective head in the sand.

The emphasis is almost always on concentrating on current matters and hoping against hope that the same thing will not happen again.

This is often wishful thinking.

Lightning may not strike twice in the same place, but claims do - and if lessons are not learnt, you will be lucky if it is only twice.Be prepared to learn from mistakes or near mistakes.

Build up a database of information that will help you to analyse what happened, why it happened and what can be done to prevent the same thing happening again.

If you think that it is impossible to prevent this sort of claim, then look at ways in which you could reduce the risk of it recurring.Look at your claims and complaints.

Which department causes most? Which supervisor? Which fee earner? Talk to the staff involved in an effort to get to the root cause of the problem in each case, but take care not to discourage them from owning up to mistakes.

Of course, this will take time - but so does dealing with a claim.

If you can get to the bottom of a problem and put in place changes that will prevent the same thing recurring or reduce its impact if it does, then that will have been a good use of your time.

You will also have protected your firm's reputation.In your database, identify the area of law, the underlying cause of the problem, when the action complained about took place, the name of the supervisor and the name of the person causing the problem - it won't necessarily be a fee earner.

It could be a secretary or more junior member of staff.

As you build the database, look for patterns in the information it contains.

Does one fee earner generate many more claims and complaints that the rest? If so, discover why this is.

Sacking the fee earner is a short-sighted solution.

If the problem lies with your systems or culture, then sacking an individual will not prevent the same thing happening again.

And if the defect results from poor management, it is pointless as well as unfair to blame the fee earner.So gather information from your claims and complaints, analyse it and learn from it.

Remove risks where you can, and minimise those you cannot.

In every case, improve your service to clients.l This column was prepared by the St.

Paul risk management team.