All outsourcing providers should be made aware of these provisions and solicitors should require any such providers to comply with them.

Law firms are data controllers in relation to the personal data that they hold for their employees, clients and third parties.  Further information on what this means for firms is provided in the Society’s Guide to GDPR.

Who owns what in files?

The same considerations apply whether the file is held as paper or in digital format.

Material ordinarily owned by the client

Documents produced by the client or produced by the solicitor for the client.

Written Opinions (whether principals or copies) but not preparatory personal notes prepared for the solicitor's benefit.

Written submissions tendered in court, but not detailed research notes and other documents generated for the solicitor's own personal use.

Draft formal documents and deeds (these may be of evidential importance to the client in the event of the loss or destruction of the principals).

Precognitions taken by the solicitor or obtained from other parties (see Swift v Bannigan 1991 S.C.L.R. 604). Reference should be made to Article 11 of the Code of Conduct for Criminal Work where the precognitions or statements may contain sensitive material and where it might be inappropriate to pass this information to clients.

Original letters received from and copy letters to third parties.

Copies of letters written to the client, although if these have been retained by the solicitor as part of a private record or if the contents relate exclusively to the contractual relationship between the solicitor and the client, the solicitor may own them.

Notes of meetings and telephone calls, which constitute the solicitor's work on behalf of the client.

Files and documents received under a mandate.

Material ordinarily owned by solicitor

Original letters received by the solicitor from the client.

Notes of internal meetings and telephone calls, which form part of the solicitor's preparatory work.

Intra-office memoranda.

As above, sensitive material and precognitions in criminal cases should be dealt with in accordance with Article 11 of the Code of Conduct for Criminal Work.

Mandates

It is matter of judgment whether a file should be copied, but copying may be prudent from a risk management perspective. The costs should be borne by the solicitor and the intention to retain a copy of the file should be explained in the terms of business letter.

If a mandate is received from one of two (or more) clients and the consent of the other(s) cannot be obtained the file can be exhibited or copies offered at the client's expense, provided that nothing is disclosed or copied which is confidential to the other party.

Additional information can be found on the Society's website at Guidance on Charging for Lending or Delivery of Files.


Multiple clients

Issues of confidentiality, duties of disclosure and informed consent of multiple clients must be borne in mind.

Where a matter develops to the extent that a solicitor cannot continue acting for multiple clients due to a conflict of interest arising or developing, care must be taken with the nature of the material copied or delivered.

Any release of correspondence or documents must either be with the consent of all or the file should be divided into parts relevant to each client, e.g. in the lender/borrower situation the file should be divided into those parts belonging to the lender and borrower respectively.

Where there are common documents they can be copied to all clients as there is no confidentiality between mutual clients.

If a lien is to be exercised, the solicitor cannot prejudice one client, e.g. a lender if that client has no liability for fees. If one client requests a file where fees are due by the other, the file should be forwarded under reservation of the lien so that it cannot be passed on to new agents.

A file can be delivered subject to an undertaking to produce it to ''the other side'' if called upon.

Each client has the right to inspect documents in which he or she has a proprietary interest (including a joint interest) and to receive copies at his or her own expense.

If, for example, one of two or more Executors requests copies/ sight of papers and/ or files of the deceased they are entitled to receive these at his or her own expense. The consent of the other appointed Executor(s) is not required as each Executor has an equal right to request copies/ sight of papers and files. If this type of situation arises it would be prudent to advise the other appointed Executor(s) of the request being made.

Retention and Destruction of Files and Financial Documents

It would be prudent for the terms of business letter to include information about the intention to destroy files and/or papers after a certain period of time following the conclusion of a transaction.

This provides evidence for both the consent to destruction and, where appropriate, consent to retain a copy of the file and/or papers for the  specified time.

The following points should be noted:

  1. It is good practice to advise the client of the firm’s policy on retention and destruction of files/papers in the terms of business letter.
  2. Documents that may be relevant to a claim should prima facie be kept for at least the period of long negative prescription if the claim has not previously been disposed of.
  3. A solicitor’s obligations to comply with GDPR need to be considered when deciding the specific date beyond which the obligation to hold a client's own documents can be said to expire.
  4. Confirmations ,decrees, deeds or other documents constituting or evidencing rights may need to be preserved indefinitely if it can be argued that they continue to be of value. The whereabouts of these documents should be set out in a closing letter once the transaction has been completed so that there is no dubiety about who holds them/where they are held. 
  5. In storing and insuring files and papers, solicitors are providing clients with a continuing service for which they can properly charge.
  6. The Master Policy insurers have clarified that destruction of the file will not affect the insurance position, but clients could take issue with the fact that the file had been destroyed if their position was prejudiced.
  7. Destruction of the client's property without consent could expose the solicitor to liability and damages.
  8. Solicitors must ensure that sensitive or privileged documents and files are not disposed of in any way which might compromise them. Document shredding within the office or by a reliable specialist contractor would appear to be the safest option.

Fire, flood etc

If clients' files and/or documents are destroyed by fire, flood or other disaster, you should inform the Society's Registrar Department of such an incident. This should be done at the earliest available opportunity and certainly no later than one month after the date of the incident. You will not be required to list the destroyed files and/or documents, but of course may do so if you wish.

The Registrar Department can be contacted registrar@lawscot.org.uk

Electronic storage of files

Electronic storage of files is dealt with in the guidance section on Scanning and Archiving Documents.

The onus rests with the solicitor to balance the obligations to comply with GDPR against the need to preserve files and papers.

Care must be taken to ensure that no important papers such as confirmations, decrees, etc - which should normally be kept separate from other correspondence are in any file being destroyed.

So far as financial records are concerned regard should be had to the terms of Rule B6 and the relative Guidance.

Suggested timings for file retention 

The following are suggested retention periods for various categories of cases and each firm is free to use this guide or select other retention periods as they see fit.

Simple Debt Collection

Ten years after final completion i.e. after the time for appeal has elapsed.

Divorce and consistorial matters

Ten years after final completion, e.g. after maintenance, residence and contact orders, etc, have ceased to have effect, or children have reached majority.

Civil court cases

Ten years after completion.

Criminal cases 
- Summary cases

Files in respect of summary cases should be retained for three years following the date of conclusion of proceedings.

- Solemn cases

In solemn cases resulting in conviction files should be retained for the duration of the custodial sentence if it is more than three years in length. 

If the client is acquitted or the sentence is one of less than 3 years in length the files should be retained for three years from the date of conclusion of proceedings.

If the case is neither indicted nor reduced to summary complaint the file should be kept for a three year period beginning one year after the date of first appearance on petition (or three years from the date that written confirmation is received from the Crown that there are to be ‘no further proceedings’).

In murder cases and other cases involving disposal by way of life imprisonment (such as the imposition of an Order for Lifelong Restriction) all papers should be retained indefinitely.

Executries

The retention period may be of particular importance in cases where no clear decision has been taken to discharge legal rights.

Files should be retained for the period which is the later of:

(i) Twenty years after the date of the approval of the "final" accounts of the executry; or 

(ii) Two years from the death of the deceased's spouse or civil partner (if applicable)

Relevant documents and papers may, by agreement, be sent to the Executor for safekeeping since prior rights and legal rights only prescribe if not claimed in the twenty years after becoming enforceable.

Continuing trusts

Ten years after the termination of the Trust.

Conveyancing transactions

The following suggested timings are primarily aimed at residential conveyancing files as we are aware that commercial firms generally have their own policies. However, these periods may be used for commercial transactions if a firm decides that they wish to do so.

Purchase: Ten years after completion-although the file may be of use until the property is subsequently disposed of.

Sale: One year later after completion (i.e. after implementing Letter of Obligation; dealing with any funds retained; and after Missives have ceased to have effect).

Solicitors should be vigilant to the fact that there may be obligations placed upon them to retain files by other bodies, such as UK Finance, and should ensure that these obligations are complied with.

Company work

Ten years after completion.

Endowment and investment business

Given the nature of this work endowment and investment business files should be retained in line with the guidance provided by the Financial Conduct Authority.

Other correspondence files

Five years after completion of the business.

Financial records

Law firms should also be aware that “the required retention period” for accounting records is defined by Rule B6.1.1 as being, the “remainder of the financial year of the practice unit and a further six financial years”.

Documents containing client's tax and VAT affairs must be retained for at least the relevant statutory periods.

Compliance with HMRC required retention periods or other statutory requirements for retention of certain financial documents should be borne in mind when firms are considering how long to retain documents for.

If, for any reason, a situation was to arise whereby the statutory retention period conflicts with the Society’s guidance on retention periods firms should comply with the statutory requirement.

Money laundering - customer due diligence records

Firms should be aware of the retention requirements of Regulation 40 of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. 

Closing of files

In cases where the matter in which a solicitor was instructed has not come to an obvious and natural conclusion there is a professional duty upon a solicitor to advise a client in writing that the file will be closed in the absence of their instructions within a specific, reasonable period of time.

This is clearly sound common sense in the situation where the solicitor is sitting waiting for further instructions. This allows for dormant files to be closed, accounts to be rendered either to the client or SLAB and both solicitor and client know the matter has come to an end. However, there are cases such as old conveyancing transactions after the delivery of the Search and other cases where the matter is obviously concluded where the duty is not the same.

Record of Destruction

When files, papers and/or documents are destroyed a separate record should be retained of the date of destruction which should include a general description of what was destroyed.