Learning lessons that lessen risk

The opportunity to learn lessons and minimise the risk of repetition must be the only positive feature of a complaint or a claim by a client.

The following case studies and the analysis that follows each show that identifying the true underlying cause or causes is critical to the process.

Case study

When Mr A and his first wife divorced, nothing was done to evacuate the survivorship destination in the title to the matrimonial home.  Mr A remarried and, anxious to ensure that proper provision was made for his new wife, made a Will in which he left half of his half share in the house to her and the other half to his children in equal shares. The Will did not evacuate the special destination. When Mr A died a year later, the survivorship destination operated so that the entire property now belonged to Mr A’s first wife.

The Claim

Mr A’s widow made a claim against the solicitors who prepared the Will for the loss of her intended share of her late husband’s half share in the property.

Underlying cause of claim

What was the underlying cause of this claim? A misunderstanding as to the effect of the survivorship destination in the title? A failure to appreciate the requirement for the destination to be evacuated in order for the provisions of the Will to receive their intended effect? Perhaps a failure to identify the existence of the survivorship destination?

Lessons to be learnt

When preparing a Will for a client, you need to be aware of and take into account –

• any special destination in the title to the testator’s heritable property
• the effect of that special destination.

How to prevent a recurrence?

Consider having a checklist/aide memoire prompting –

• examination of title deeds
• specifically, consideration of the effect of any special destination.

Case Study

The firm acted for Mrs B in a matrimonial matter. Although the issue was raised at an early stage of discussions with the client, legal aid was never actually applied for.

The Claim

Mrs B alleged that the firm had failed to protect her interests and made a claim for the amount she alleged she ought to have received from SLAB.

Underlying Cause of Claim

On the basis of these brief facts, it is difficult to tell what was the underlying cause of the omission which resulted in this particular claim. Was the true cause lack of knowledge of legal aid rules and regulations, failure to establish the client’s eligibility or some other cause?

In actual fact, on investigation, it emerged that the true cause was that there had been a break down in communication when the file was handed over from the retiring partner to the partner taking over responsibility for the file. An incorrect assumption was made by the retiring partner that his successor would attend to the matter of legal aid. The successor partner assumed, again incorrectly, that the retiring partner had considered the point and established that legal aid was not available. As a result, no application for legal aid was ever submitted.  

Lessons to be learnt

Whenever responsibility for a file is transferred from one fee earner to another there is a real risk of a break down in communication, an incorrect assumption, a misunderstanding about some aspect of the transaction, litigation or other piece of work. The potential consequences of such a misunderstanding could be a failure to consider a particular course of action, as in this case, or delay, a missed time limit, failure to ask the client for a particular piece of information or instructions.

Those situations could occur whenever a file is transferred whether from a retiring partner, a trainee moving departments, an assistant leaving the firm or when the file is transferred between departments or to correspondents/agents.

How to prevent recurrence

Whenever a file is being transferred, make a particular point of giving and receiving a thorough handover briefing. That briefing, preferably to include a set of notes, should establish the current status of the matter, what has happened to date, what requires to happen next, what the relevant deadlines and time limits are and confirmation that they are appropriately diaried. The client should of course be advised of the transfer of responsibility for the file.

Case Study

After much discussion with the clients, missives were concluded for Mr and Mrs C’s purchase of a plot on which they intended to build their dream home. The missives were conditional on planning permission being obtained within six months so that Mr and Mrs C could give notice rescinding the missives within the six month period if planning permission had not been obtained.

The planning application was still under discussion when the six month period expired. No action was taken by or on behalf of the Cs to rescind the missives and, accordingly, the Cs were bound to proceed with the purchase. They were refused planning permission.  

Claim

Mr and Mrs C made a claim against their solicitor for the losses they incurred on the re-sale of the plot at a price lower than their purchase price.

Underlying Cause of Claim

On the basis of the facts, the true cause(s) of this claim may have included one or more of the following –

• failure to ensure that the clients were aware of the meaning and implications of the missives condition; the action that required to be taken in different circumstances to ensure that the clients’ position was protected and the consequences of failure to take that action
• failure to ensure that it was understood by all concerned, including the clients, who would have responsibility for taking the appropriate action
• failure to diary the critical date(s) effectively with appropriate diary dates to prompt (and allow time for) discussions with the clients ahead of the ultimate deadline
• failure to check the precise terms of the missives condition, relying instead on faulty recollection of the specific terms
• making an incorrect assumption about the nature of the condition or about the allocation of responsibility for taking the necessary action

Lesson to be learnt

This case shows that it is not safe –

• to rely on one’s recollection of the precise terms of a missives condition, particularly after a period of months
• to assume that a client will understand the specific terms and implications of a missives condition and the need for certain action to be taken timeously to protect their own interests.

How to prevent a recurrence

When a time limit is imposed –

• make it clear to the client in writing whose responsibility it is to take action within the time limit
• explain the consequences of failure to take that action
• ensure that the critical date is diaried with countdown dates also diaried to prompt and allow time for discussion with the client and appropriate action to be taken. Even where the client has the responsibility for taking appropriate action, consider having the matter diaried yourself as a back-up so that you can remind/prompt the client
• double check the precise terms of the missives condition when the critical dates are diaried. Bear in mind that it may fall to someone else in the practice to act upon the diary notes
• a suitable checklist could help to prompt those action points.

Alistair Sim is Associate Director in the Professional Liabilities Division at Marsh UK Limited (e-mail : Alistair.J.Sim@marsh.com)

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.