Risk management

Retainer letters

Retainer letters are also known as letters of engagement and probably one of the most important documents in a solicitor's defence against a claim of negligence.

They are, if properly written and comprehensive, fair proof that the solicitor has done the work as promised.

These letters can either be incorporated within your rule 15 client care letter or issued separately.

Below we have outlined what should be set out in a retainer letter, which will hopefully vindicate you should you be hit with an unfair claim of negligence.

Cost is one of the main underlying reasons for negligence claims being brought against a solicitor.

You should always be realistic when you quote costs in the retainer letter, and it is better to overestimate than underestimate what the end, or monthly, fee will be.

If you cannot estimate a price due to the fact that the work is too complicated to assess, then this fact should be outlined within the retainer letter, along with a proper breakdown of costs which will and could be incurred.

Timing is another big cause of negligence claims.

As with costs, our best advice here is to be completely practical.

Do not promise your client that you can do a job in two months just because that is what the client wants to hear.

If the job will take three months at the most, then the retainer letter should stipulate that, in your opinion, the work undertaken will take 'at least three months'.

The client's instructions, and your interpretation of them, should also be set out in the retainer letter.

You need to list everything you believe you will be undertaking on behalf of your clients, and also, just as importantly, any areas which you will not be working on.

It is often the case that the solicitor, following an initial meeting with the client, will think the client has instructed him fully.

However, often the client has not stipulated exactly what he wants doing and will assume alternative areas of the law are also being covered.

For example, if tax is not your area of expertise when you are drafting a will, let the client know in the retainer letter you will not be covering any tax issues in the work you are undertaking.

Legalese should also be avoided as much as possible in the retainer letter.

The majority of clients will not understand the language of the law and, therefore, can easily misconstrue what is being set out in the retainer letter, especially in the case of what work is being undertaken.

It is the lawyer's responsibility to ensure the client fully understands everything set out in the retainer letter.

The retainer letter should be as comprehensive as possible and written in simple language.

Should a claim be brought against you and your practice for negligence, then your retainer letter will make up a key part of the defence, and as such needs to be carefully considered and worded.

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