Searching questions about managing risks

It is now possible, or will be very soon now, for practitioners to access Registers of Scotland information through a web-based system and to obtain information from the land, property and personal registers on-line.

As far as solicitors are concerned, by subscribing to this service, it will be possible to conduct searches for specific items of information which might be required in connection with property work, litigation or other aspects of client work.  It will also be possible to produce search reports in connection with property transactions.

These activities are regarded by the Master Policy insurers as falling within the scope of Master Policy cover.  That means that, in principle, but, as always, subject to the terms and conditions of the Master Policy there is cover if a claim arises which is attributable to a mistake made whether the mistake was in accessing data or in how it was interpreted or reproduced.

What could go wrong?

The data may be incorrect

If the data which is accessed and relied upon proves to be incorrect, the consequences will not be any different from the consequences of incorrect data being obtained in the conventional way.  The remedies may be different though.  Certain data produced by the Registers of Scotland Executive Agency are subject to the Keeper’s statutory indemnity in terms of the 1979 Act.  That will apply also to data obtained via the REGISTERS DIRECT facility.  While other data is not necessarily subject to the same statutory indemnity, there is understood to be no intention to avoid liability for the consequences of incorrect data whether obtained via REGISTERS DIRECT or otherwise.

Had any of this data been elicited and reported on by one of the commercial searchers, the practitioner’s recourse would have been against the searchers in the first instance.

It is understood that print-outs from the system will bear a ‘watermark’ and the date and time.  This will be crucial to establishing the source of the information and the potential remedies in the event of error.

A mistake could be made in interpreting the information

However information has been obtained from the Agency, whether via REGISTERS DIRECT, through one of the commercial searchers or by visiting the Agency in person and inspecting the search sheets etc, there is clearly a risk that the information is transcribed incorrectly or is misconstrued.

The computer systems involved could malfunction or fail

In practical terms this means that there is a risk of information being unavailable or incorrect! corrupt albeit that the Agency indicate that they have taken precautions to minimise the risk of non-availability of the system or the intrusion of viruses.  The REGISTERS DIRECT terms and conditions seek to exclude liability for the consequences of systems non-availability.

Terms and conditions of direct access

It is beyond the scope of this article to comment on the detailed terms and conditions on which the Agency makes the direct access facility available.  It is appropriate however to draw attention to the fact that, while there is a statutory indemnity in respect of certain of the information provided by the Agency there are terms and conditions which regulate the matter of liability for the consequences of systems failures, system non-availability, viruses etc.

Minimising the risks

If you subscribe to the facility, what can you do to minimise the risks and their consequences?

• weigh up the relative risks involved and decide whether you will use the system for the purpose of enquiries only or for the purpose of producing search reports.
• as with any system, a degree of skill and knowledge is required if the system is to be used efficiently and reliably.  It is therefore appropriate that those who will have the authorisation to access data should have training and, potentially, supervision.  Note: It is understood that top-up training will be available.
• access to the system is restricted by means of sign-ons and passwords.  The usual controls should be exercised (changing of passwords, no sharing of IDs or passwords, etc)
• whatever the uses to be made of the system draw up a set of procedures identifying who can use the system; what the system can/cannot be used for; how the system should be operated and what records need to be kept
• take (and retain) print outs of relevant entries rather than merely transcribing the information.  This will be important in the event of it being necessary to prove that the fault for a piece of information being incorrect rests with the Agency and not with your firm
• in the initial period, it may be worthwhile having information double checked or spot checked
• it may be appropriate for a standard instruction form to be devised so that there is no doubt about the information required / the nature of the search to be undertaken
• consider and implement whatever precautions are appropriate in terms of system back-ups and virus checks on your own system
• keep a record of any problems you have experienced in using the system.  Review this on a regular basis so that appropriate remedial action is taken.  This review might reveal, for instance, that further training is required; that there need to be restrictions placed on who has access to the system or that there are systems-related problems which need to be taken up with the Agency or with the firm’s own IT personnel/advisers.  Note: It is understood that there will be a regular forum in the form of a user group to exchange views as well as electronic exchange, key account management and feedback/complaint facilities
• as always, consider whether your instructions require you to warrant information and consider also whether you are in a position to warrant that information with/without qualification
• in relation to personal searches, great care will require to be taken to check through multiple entries in respect of common names to ensure that relevant entries are not missed or discarded.  For this reason, double checking is probably of particular importance in relation to personal searches.

Conflict of interest between Borrower and Spouse

In next month’s issue Alistair Sim considers implications of two recent cases in England and Wales which deal with duties of solicitors in relation to security transactions.  The cases do not necessarily represent the law in Scotland but it is well worth considering whether there may be risk management lessons to learn from them.

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 of Sedgwick Professions