Risk management issues arising from delays in the context of managing clients’ expectations

Clients need to be kept regularly informed of the progress of their transaction, even if that means reporting and explaining lack of progress. Not only is this a basic professional responsibility but it allows clients to plan ahead and helps to manage clients’ expectations. Failure to communicate with clients consistently features as one of the principal grounds of clients’ complaints about service.

Case study

Mr Dickens telephones his solicitor, Smith, about evicting tenants from one of Dickens’ residential properties. The property has been let on a short assured tenancy. Dickens has already served a notice to quit (downloaded from the Internet). The notice has now elapsed with the tenants still in possession. He now wishes to have the tenants evicted. Smith advises that he will get right onto this (especially since Dickens is quite a good client who owns and rents out several commercial properties). Dickens wants to put the flat on the market as soon as possible.

Smith dictates the details and passes the file to his secretary. A week later, Dickens calls to say the tenants are still not out. Smith assures him that matters are in hand and the action is prepared. Later that day, the summons appears on his desk, only just having been typed. Annoyed that he hadn’t chased this up he tells his trainee to get it down to court that day.

Dickens phones up next week and asks what is happening with the case. Smith advises the papers are with the court and he is expecting everything to get moving soon. A week passes and Smith receives an angry call from Dickens asking why the tenants are still there. Smith explains to Dickens that he requires to have the summons returned by the sheriff clerk. Smith then calls the court himself, to discover that the summons had been misplaced and was only now being warranted. The summons is then returned as it was unsigned. Having attended to this, it is returned to court by Smith. Having received the warranted summons, Smith proceeds to have this served (although recorded delivery bounces and sheriff officers are instructed). He then sends out a letter to Dickens explaining that the case will call in three weeks’ time.

In three weeks, Dickens calls and asks what is going on with the case – it has now been six weeks since his initial consultation. Smith explains that the tenants are seeking to defend the action but that Dickens shouldn’t worry as he has mandatory grounds for repossession. In six weeks’ time, Smith reports back to Dickens that they have decree but extract has been superseded for 6 months as the tenants have small children and the wife is pregnant.

Dickens is apoplectic at these “delays”, refuses to pay any more fees and moves all his business to another solicitor. In addition, he also gets himself into serious trouble by changing the locks on the premises and throwing the tenants’ belongings onto the street.

Risk management points:

  • Managing clients’ expectations – many “delays” are not “delays” at all and are simply part and parcel of normal procedures – the client should be dissuaded from placing blame for these issues at the door of the solicitor
  • Flagging up risks which the client may encounter
  • Timetabling processes with the client
  • Checking office systems

It is easy, in this scenario, to simply accept that a client has been lost (and this, of itself, is unlikely to substantially affect the firm’s revenues). It is also easy to discount this situation from a risk management perspective because it is unlikely to lead to a claim on the Master Policy (unless, say, Dickens’ subsequent actions in evicting the tenants give rise to a claim which Dickens subsequently pursues against Smith on the basis that Smith never warned him against this course of action).

However, the loss of a client who generates a regular flow of fee income is not good for business and risk management goes beyond protecting oneself from major claims – by developing efficient systems within the firm, that is likely to enhance the level of efficiency, client satisfaction/retention and profitability.

In the above scenario, Smith ought to have paid more attention to the following:

At the initial meeting

The client should have been advised about the possible timescales of such an action for recovery. Regardless of the summary cause “fast track” system, clients’ and lawyers’ ideas of “fast” are often at opposite ends of the chronological spectrum.

Smith should have explained the procedure for getting the summons warranted – and that any type of procedure involves court processes, in addition to actions by the solicitor.

Smith should also have explained the procedure for service of the summons and the potential requirement to instruct sheriff officers.

In addition, some general comments to the client about the length of time a case might take would have been appropriate. The practitioner will know of the potential for superseded extract but why is there any reason to believe the client does? The effect for the client is the same – there is no possibility of having the tenant removed for another (potentially lengthy) period.

Depending on the client, it is perhaps appropriate to advise about the necessity for following court procedures and not taking the law into one’s own hands.

The timetable to which the client is working should also be investigated. It may be that the client is planning a particular course of action, based entirely on his estimation of how long a legal process will take. Without being disabused of this notion at an early stage, the client will inevitably be disappointed by the outcome.

These matters should be discussed at the initial meeting with the client or set out in a letter (or as part of the firm’s letter of engagement).

Post instructions:

It is often difficult to keep track of the various stages of transactions, particularly if there is a typing backlog. Being unable to advise the client as to the stage the transaction has reached does not instil confidence and may also lead to a misleading picture being given to the client (out of error, rather than deliberately). Checklists and diary reminders can alleviate these problems.

Similar checking procedures can also flag up problems where the return of documents is awaited.

Clients should be regularly informed of the progress of their transaction – not only is this a basic professional responsibility but it allows clients to plan ahead.

Failures to intimate

There are a number of situations where intimation to third parties is required in litigation actions – one being intimation to the Motor Insurer’s Bureau in terms of the statutory agreements relative to uninsured and untraced drivers. As far as proceedings against uninsured drivers are concerned, practitioners who do not regularly deal with MIB claims should pay particular attention to the procedural rules laid down in the agreements. MIB must be given written notice that proceedings have been raised. The notice, application form and supporting documents (including copy writ, any relevant correspondence with Defender) must reach MIB no later than 14 days after commencement of proceedings. Delivery of documents by DX cannot, of course, be proved and service should be by recorded delivery or fax.

MIB, for obvious reasons, requires to be kept advised of any material progress in the conduct of such claims and practitioners who are unused to dealing with motor claims handling should be aware of the risks involved in failing to intimate properly.

Contributions and suggestions welcomed

Your contributions and suggestions are always welcome. If you are prepared to share practical risk management tips or to raise issues of concern which might be covered in a future issue of this page, that would be very much welcomed.

Have a successful and risk free 2002!

The information in this page is (a) intended to provide guidance on matters of practical risk management and not on issues of law and (b) is necessarily of a generalised nature. It is not specific to any practice or to any individual and should not be relied on as stating the correct legal position. Alistair Sim is Associate Director in the Professional Liabilities Division at Marsh UK Limited

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