Risk management systems and procedures can bring benefits quite apart from reducing the risk of claims

Many firms are seeing the benefits of introducing Risk Management systems and procedures.  There are increasing number of practices qualifying for Master Policy premium discount and there are signs of improvement in the claims experience of the profession as a whole.

But even firms which have put systems in place are still experiencing claims of the type that the systems ought to have prevented.  Individuals within those firms have chosen not to subscribe to the systems – in some cases because of a belief that the problem wouldn’t happen to them, in some cases because they regard the systems as just a chore and a waste of time.

Take, as an example, the solicitor who was devastated when a personal injuries claim he was handling became time barred.  The awful realisation was even worse for him because his firm had put in a lot of effort and expense into a fairly sophisticated system for managing critical dates.

Why had the system not prevented the problem? Because the date in question hadn’t been entered into the system at all. Why not? Perhaps because it hadn’t been clear at the outset when the three year period would run from.  Maybe because the solicitor believed he couldn’t possibly overlook this particular deadline.  Maybe it was a blind spot or a mental block, but whatever the explanation, the date didn’t find its way into the system and the deadline was missed.

That experience shows how, without a diary system of some sort, the only things that save us from missing deadlines are our memory or others prompting us and clearly that is unreliable, stressful and high risk.  We could check all our files every day but that is patently impractical, time-consuming and inefficient.

No one who has to manage timescales and deadlines of any sort would dream of operating without some sort of diary or reminder system.  An effective diary system helps avoid claims but also avoids the panic situation and the “fire fighting” which is stressful and such a waste of time.  An effective diarying/reminder system will put you in control of timescales by giving you warnings at appropriate intervals ahead of the deadline; by catering for fee earner absences; by incorporating a double check on critical dates; by having back-ups if computerised.  With these controls in place, you can get on with your work, sparing yourself the stress and wasted time when deadlines take us by surprise.

What about other risk management systems and procedures? How do they put us in control? Do they have other benefits too?


Well drafted checklists can help in various ways.  They can help avoid oversights by prompting consideration of relevant issues.  They can be used as a crib sheet when taking instructions or giving advice so we don’t have to rely on our memory alone.  This can enable us to concentrate on what is unusual about a particular case.  For some types of work, the client could be asked to complete a checklist or questionnaire as an efficient way of eliciting information and instructions from the client.  This might help make it clear to clients how important full information and clear instructions are to achieving the clients’ objectives.  It shifts on to the client part of the responsibility for achieving the desired outcome.

Client Engagement Letters

It is easy enough to say that engagement letters help manage the client’s expectations but what does that mean in practice? If no letter is issued there must be a greater risk of the client having expectations as regards service and result which are unrealistic.  An engagement letter, drafted in clear terms, puts you in a better position to control the client’s expectations and to avoid client dissatisfaction.

In the course of drafting an engagement letter, we have to think about various important aspects of the work we are taking on and the service we are providing.  What are we undertaking to do for the client? What is the basis of charging for the work and how might that alter? Who is actually doing the work? Does the client understand? Addressing these questions gets the file off to the best possible start.

File checks

Regular file checks help avoid the panics when matters are overlooked and the stressful and costly results of a deadline being missed altogether.  Again, you are in control.

Systems and procedures, whatever form they take, help you to manage client work more effectively and to stay in control.  You also reduce stress and client dissatisfaction and improve efficiency and job satisfaction.

Company searches – a warning

It is understood that there have been certain changes in the way records are maintained which make it crucial to take particular care when obtaining searches in respect of company liquidations and receiverships.

Certain returns concerning liquidations and receiverships are now being made to the Accountant in Bankruptcy rather than the Registrar of Companies with the result that it may be necessary to have the records of both the Accountant in Bankruptcy and the Registrar of Companies searched for completeness.

Where company search reports are being obtained and relied on, it is crucial to ensure that all relevant records have been checked.

Talking about the law – the risks

A recent enquiry has raised questions concerning cover under the Master Policy and an area of professional risk for solicitors.

The practitioner is soon to be involved in writing a section of a legal text book.  He is being asked to sign an agreement in terms of which he undertakes to indemnify the publishers for any claim arising out of errors in the text.  The Master Policy insurers have confirmed that in the particular circumstances there is cover for any liability arising for the solicitor in question, however they have raised numerous objections to the onerous nature of the terms and conditions of the publishers’ indemnity.

Solicitors are regularly involved in seminars, newspaper articles, radio and television appearances etc, and it is essential to be quite clear about the terms and conditions on which these activities are undertaken.  If there is any doubt about the potential liability being undertaken, the position should be clarified with the seminar organiser, publishers, etc, and confirmation should also be sought regarding the implications for the solicitor’s Professional Indemnity Insurance cover.   

Bank drafts – any comments?

Since referring to the risks associated with bank drafts last month, other practitioners have been in touch regarding problems they have encountered in practice or concerns they have about the use of bank drafts.  If there are practical Risk Management issues that readers are able and willing to share through the medium of this column, contributions which could benefit other readers would be very much welcomed.

Alistair Sim is Associate Director at Marsh UK Limited

The information/advice on this page is (a) advice on practical Risk Management and not on legal issues, and (b) is necessarily of a generalised nature. It is not specific to any practice or to any individual, nor should it be relied on as stating the correct legal position.

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