Missed critical dates are, of course, a feature of the claims experience of most areas of practice – not just litigation. But it is not surprising that particular attention should focus on missed critical dates in litigation. The court process is, after all, governed by critical dates – whether for raising proceedings or critical dates by which something has to be done, such as lodging productions, in proceedings which have already been raised. It has been stressed often enough in the past in this column that a “belt and braces” approach to diary systems is necessary to manage critical dates.
The underlying cause(s) of most claims in the litigation claims experience can be traced to one or more of the following factors which feature in the claims experience of all sizes of practice, not only in Scotland but also in other jurisdictions, and in all areas of practice:
- poor engagement
- poor communication
- poor people management
- poor case management.
Many claims stem from a failure to manage the client’s expectations. Failing to identify and address, or take seriously, clients’ expectations as regards service and outcome from the outset may sow the seeds of a subsequent breakdown in the solicitor-client relationship and a possible claim or complaint.
Some clients may present difficult risk management challenges: for example, clients who seem to think they are the world’s leading experts on personal injuries claims and who are convinced that not only do they have a cast-iron case which they are bound to win, but that they will be awarded a fortune in damages by the court. In certain cases, the client’s expectations may be impossible for any solicitor to manage and it may be wise to decline to act. A rigorous client-vetting procedure should ensure that the client’s expectations are identified, so that an appropriate strategy can be devised and implemented in order to manage those expectations.
As well as managing the client’s expectations as to the outcome of their case, it is necessary to say something about timescale in terms of engagement, otherwise the client, who may well have their own ideas of timescale, may accuse you of a delay which is not your fault.Case study
AB & Co were instructed by a landlord to raise court proceedings to remove his tenant whose lease had expired. The action was undefended and in due course decree was obtained and extracted. AB & Co had attended to their client’s instructions promptly and the time taken from receipt of instructions to receipt of the extract decree was unexceptional. Nevertheless, AB & Co were astonished to receive a letter form their client complaining of inordinate delay and making a claim on the basis that he had arranged for a new tenant to move into the premises a fortnight after he had given them instructions.
If AB & Co had given an indication of the anticipated timescale (or range of potential timescales) for the court action in terms of engagement and had kept the client informed of progress (updating, as necessary, any previously estimated timescales), the claim could have been avoided. This case study, and the next one, illustrate another important point.Case study
In the course of negotiating settlement of his client’s claim for damages for personal injuries, a solicitor indicated that he expected to achieve a settlement of £200,000 within two months. On the faith of that statement, the client subsequently proceeded to enter into missives to purchase a new house. When the expected settlement did not materialise by the time the house purchase transaction was due to settle, the client had to withdraw from the transaction and made a claim against the solicitor.
In the first case study, the client had his own agenda from the outset, which he had not shared with his solicitor and which the solicitor had not discovered at the client vetting stage, and took action on the basis of an assumed timescale. In the second, the solicitor had not suitably qualified his advice on timescale and quantum to make the client aware that the outcome was not certain or guaranteed. In both, the client took action without further reference to the solicitor. It might be helpful to minimise the risk of a claim in such circumstances if terms of engagement state that clients should not take action based on anticipated outcome or timescale without reference to their solicitor.
Problems arising in communications between solicitor and client, and between solicitor and solicitor, during negotiations for settlement can sometimes show up weaknesses in firms’ “housekeeping”.Case study
After a series of telephone conversations with the defenders’ solicitor concerning settlement of a commercial dispute, the pursuers’ solicitor faxed a letter accepting the defenders’ offer of just over £750,000 to settle the claim.
Two hours later, the defenders’ solicitor telephoned the pursuers’ solicitor following up on the earlier conversations and it quickly became apparent to the pursuers’ solicitor that his opposite number was unaware of the faxed letter. In the course of the telephone conversation, the offer of approximately £750,000 was increased by £80,000. The increased offer of around £830,000 was fairly quickly accepted by the pursuers’ solicitor and the defenders were committed to paying £80,000 more than the pursuers had been prepared to accept.
While it may be impossible to eliminate entirely the risk shown in the case study, nonetheless the risk can be minimised if firms’ risk management systems provide a procedure for prompt distribution of letters and incoming faxes to the appropriate person. This situation could also have arisen with a letter or other hard copy communication.
Is there a greater or lesser risk if the practice operates on a paperless basis? Incoming letters may go for scanning first before being seen by the addressee. If there is scanning down time, what happens about communications marked as urgent? Again, appropriate risk management procedures should be put in place to minimise the risk.
DG, an assistant in the litigation department, had just returned to work after a four-week absence due to illness. He was pleased to find that, not only had all his critical court dates been dealt with, but all his incoming mail had been answered and his cases progressed during his absence. He was very pleased to note that a particularly difficult case involving his client Eason Reid Ltd had been settled. A letter from the client had been received instructing that an offer be made to the claimant. Two days later that offer had been put to the other side and had been immediately accepted. However, when DG opened his email inbox, he was horrified to find dozens of emails. None of these had been looked at during his absence. One email was from Eason Reid’s managing director rescinding their instructions to make the offer in settlement. The email had been sent the day after the letter, but was received in DG’s inbox before the client’s letter was received and acted upon.
Every practice should have procedures to deal with fee earner absence. It should cover allocation of responsibility for the absent fee earner’s files to ensure that (a) critical dates are managed, (b) transactions/cases are progressed, and (c) clients’ expectations are managed.
Practices should have as part of their email procedures a policy for monitoring incoming emails of absent fee earners. These emails should be printed off at regular intervals and given to the appropriate fee earner allocated to deal with that particular matter. An “Out of Office” message should be set up to notify the sender of an email of the absence of the fee earner and who they should contact (and how) in his or her absence.
It might also have been helpful if it had been stated in terms of engagement that all instructions given by email must be confirmed by telephone or letter.
Claims can arise where the client alleges that a settlement which his solicitor has negotiated is less than he was entitled, or expected, to receive. Common scenarios are:
- the claim was settled for a lower figure than an earlier offer that was rejected;
- the claim was settled for a lower figure than the amount his solicitor had advised he could expect to receive;
- the offer of settlement should have been rejected as a larger settlement could have been obtained at a later stage;
- the client alleges that he was pressurised into accepting a settlement on the morning of the proof in his case.
Communication from the outset is the key to avoiding these kinds of “post-settlement remorse”. Communicate with clients in a way that enables them to make informed decisions.
Keep clients updated on a regular basis with opinions on liability and quantum, with any appropriate qualifications or limitations on your advice.
Obtain written instructions to settle where the client has agreed to accept an offer, and, conversely, written instructions to reject where the client has decided to reject an offer. If the client is accepting/rejecting an offer against your advice, set out the advice in writing and obtain a written acknowledgment from the client that the instructions they have given you are contrary to your advice.
“Doors of court” settlements present a particular risk management challenge. While it is impossible to cater for every contingency that may arise, clients at the very least should be made aware that settlement negotiations might take place even if there has been no whisper of settlement during the course of the proceedings to date, and that they may be required to make quick decisions. To prepare the client, it may be helpful to rehearse possible settlement proposal scenarios. While it may be impractical to obtain the client’s written instructions at court to accept an offer in settlement, make clear, complete and contemporaneous attendance notes and confirm in writing to the client as soon as possible the gist of the discussions that took place and the instructions you were given.
Russell Lang and Marsh
Russell Lang is a former solicitor in private practice who works in the FinPro (Financial and Professional Risks) National Practice at Marsh, the world’s leading risk and insurance services firm. To contact Russell, email: firstname.lastname@example.org .
The information contained in this article provides only a general overview of subjects covered, is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Insureds should consult their insurance and legal advisers regarding specific coverage issues.
Marsh Ltd is authorised and regulated by the Financial Services Authority.
In this issue
- CGT: Don't lose out on 6 April 2008
- Bank charges and the Unfair Terms Regulations
- One Scotland, many cultures?
- Promoting our ideals
- Out of the wrong pocket
- Market movers
- In and out of court
- Towards an efficient system
- Keeper's rejection of registration applications
- Financial health check
- Before the axe falls
- Summary trials: deciding the facts
- The cost of guardianship
- CSR takes centre stage
- Beyond the principles
- Question of technique
- Time's up
- Persons liable
- Fair competition or own goal?
- Always the Land Court?
- Rewriting the DDA?
- Away win for Webster
- Points of entry
- Website reviews
- Book reviews
- Banding together
- Name, rank and number
- Family law for conveyancers