Risk management

Keeping paper records

Should your firm be hit with a negligence claim, one of the main parts of your defence against such an accusation should be a complete and comprehensive paper trail.

However, by paper trail we do not just mean copies of any written correspondence between parties, but also all documentation covering every aspect of work undertaken for the client from day one.

This documentation will act as a record of all advice given and work accomplished for the client.

Therefore, rather than simply attaching a scribbled Post-It note into a client's file, make sure that all records are written up professionally and contain all relevant information.

Below we have outlined what should be included in this comprehensive paper trail, and how records should be maintained:

- Make clear, written records of all telephone conversations and meetings;

- In all cases, date and sign written records.

If appropriate put time on record;

- In the case of meetings or conference calls include names of all participants;

- If a client is involved in a meeting, it can be worthwhile providing the client with a copy of the written record/minutes and asking him to sign and return it for retention on file.

This should ensure against the client claiming no knowledge of whatever course of action may have been decided upon in the meeting;

- Maintain orderly stand-alone files with records in chronological order.

Therefore, should a claim be made and the partner responsible is away, or has left the firm, all necessary documentation needed to dispute the claim can be easily found;

- Keep an efficient diary system and ensure all actions are dealt with in timely fashion, especially if legal or regulatory deadlines apply;

- Date stamp faxes as received and keep on file;

- Keep copies of e-mails on file, as opposed simply to keeping them on the computer;

- For outgoing faxes, attach individual transmission confirmation slip to back of fax;

- Maintain a central log of master receipt/transmission journals for faxes and make sure that old copies are filed, not just thrown into the bin once the central log file is full.

While it is fashionable to talk about a paperless office, the reality is that proper paper records will need to be produced in order to prove that no negligence has taken place.

Therefore, it is important to ensure that relevant documentation is filed appropriately at the end of each day, and can be easily obtained as and when it is required.

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