When a ‘diary system’ isn’t a system

Alistair Sim looks at how the experience here of missed time limits compares with the experience of other jurisdictions and promotes a ‘belt and braces’ approach to avoiding claims

Missed time limits are a consistent feature of the Master Policy claims experience. Approximately one in ten intimations arises out of allegations that personal injury claims, Industrial Tribunal applications, debt recovery proceedings etc. have become time barred on account of solicitors’ alleged errors or omissions.

According to an insurance company which provides professional liability insurance in numerous jurisdictions across Canada, ‘Although it is one of the easiest errors to prevent, simply failing to keep a proper calendar is one of the most common causes of … claims. In the last 12 years … 7.6 per cent of all claims reported – have been attributed to this error’.

The organisation which arranges compulsory professional indemnity insurance for solicitors practising in New South Wales reported that 28% of all notifications in the period 1 July 2000 to 31 March 2001 concerned out-of-time personal injury actions. This figure exceeded notifications in every other area of practice.

A challenge

So the position here appears to be better than in some jurisdictions, perhaps slightly worse than in others. This situation surely represents a challenge. If the Canadian commentary is fair, time bar claims are readily avoidable and if this category of claims could be significantly reduced it would have a significant impact on the Master Policy claims experience.

What are the causes of these claims?

• No diary at all!
• Inconsistent diarying of critical dates
• Incorrect date diarised, as a result of error as to the facts or law
• Diary system warnings not acted upon
• Client not managed properly

How to prevent these errors and omissions?

According to the Canadian commentary ‘ … this error is very easy to prevent. Everyone should have proper [reminder] systems in place. You should identify time deadlines, follow-ups and reminders. Establish a system for checking the accuracy of information inputs. Keep a backup system as a safety net. Calendar every case, not just litigation matters.’

Very often, letters notifying the Master Policy insurers include comments to the effect that the firm does have a diary system but that somehow or other this particular case wasn’t entered in the diary system. The question that arises is whether the firm truly has a diary system or if the ‘system’ is merely that fee earners all have diaries. There is a critical difference. Although this is clearly far better than no diaries at all, experience shows that, at least for some categories of critical date, it is unsafe to rely solely on individual fee earners’ individual diaries, however diligent the fee earners are in using them.

A thorough and reliable diary system needs to take into account the following:

• ‘Garbage in garbage out’ – if the critical date has not been checked before being entered in the system, then the exercise may prove to be pointless.
• It may not be you who has to act upon the diary entry/reminder - if the information that has been diarised is unintelligible to anyone other than the person who created the diary entry, again the system may fail.
• Countdown warnings essential – obviously, it is not a lot of help if the diary system only produces a warning on the very day a claim has become time barred. It may not be much better if it alerts you with only one day to go. That may be too late for action to be taken. What is required is a system that produces warnings at intervals prior to the critical date so that there is sufficient time for you to take whatever action may be required. 
• ‘Belt and braces’ – importantly, a single line of defence against time bar may be insufficient – based on experience of claims it is recommended that the arrangements described below are put in place so far as practical.
• Client needs to understand importance of critical dates – the diary system is only one aspect of protecting yourself against time bar claims – managing the client is also a crucial element. More about that later.

How to put all of this into practice?

(Double) checking critical dates

The relevant time limit needs to be reliably identified at the outset. Ideally this should be double checked, otherwise an error or incorrect assumption may go unchallenged resulting in the incorrect date being diarised and acted upon.

A checklist could be used to prompt consideration of any unusual factors eg. foreign jurisdiction, capacity/status of your client etc. that may be relevant. This will help to overcome any possible blind spots or incorrect assumptions.

Diarising critical dates

Having established the relevant start date, time limit etc., record the deadline on the file itself in a prominent position and set up the appropriate warnings in your own diary and also in the central diary. This should include countdown dates ahead of the relevant deadline.

Reviewing critical dates

Critical dates may change as the case progresses. For instance, if new information suggests that a different approach is adopted, that may affect the timescales and require all the diarised dates to be re-scheduled.

Acting upon diary system warnings

However good the system is, it is no use at all if the warnings it generates are simply ignored. That situation could happen if the warnings are going to a fee earner who, for whatever reason, isn’t coping, doesn’t know what to do next or has just got “stuck”.

A system which requires fee earners to confirm that action has been taken in response to prompts generated by the diary system may be appropriate but how to ensure that fee earners are actually complying with that requirement? Monitoring of compliance may be made easier if the diary arrangements have been incorporated into an IT system which flags up to a nominated partner any diary prompts which the fee earner has not actioned.

Case review meetings

As part of your ‘belt and braces’ approach to avoiding time bar claims, consider holding regular scheduled case review meetings at which there is a particular emphasis on cases approaching critical dates. These provide an opportunity to identify and seek/offer assistance with mental block cases and situations where colleagues are not coping or have got “stuck”.

While this arrangement may appear suited only to firms with larger numbers of, e.g. litigation practitioners, could the arrangement not be adapted to operate across disciplines or for sole practitioners? After all, every type of file involves time limits and we are all capable of getting stuck or developing a mental block whatever our type of work. The mental block may be overcome merely by talking through the issue with a colleague or, in the case of a sole practitioner, with a local practitioner on a confidential basis. If we expect ourselves and our colleagues always to cope in isolation, that may create risks which could so easily be avoided by operating an informal referral arrangement on a reciprocal basis. 

File reviews

An essential element of the ‘belt and braces’ approach involves all fee earners undertaking a regular, scheduled review of their own files (all of them) to ensure that all files are up to date, that the client is being kept regularly updated, that critical dates are accurately diarised and that appropriate action is being taken in relation to any imminent deadline.

It may be second nature to some to undertake these reviews. Others may benefit from assistance in establishing this discipline. Unless compliance is monitored, there is likely to be inconsistency in the way reviews are undertaken.

Independent file review/audit
On a scheduled basis, fee earners may be required to undertake independent reviews of colleagues’ files on a sample basis. This arrangement may pick up situations where fee earners are not coping or are out of their depth but have not asked for help. It can also identify inconsistencies in the way issues are dealt with by different fee earners and facilitate discussion of areas of risk and risk improvement.

Managing the client
In some cases, time bar claims have arisen on account of the client providing information or instructions which are inaccurate, unclear or too late.

Clear communication is vital to ensure that the client understands from the outset the importance of complying with timescales and deadlines and of providing full, accurate and timeous information and instructions. The client must understand the implications of failing to respond to requests for information/instructions including the costs implications should there be any delay.

Client disengagement or non-engagement
Occasionally, problems arise where the client has failed to meet his obligations eg. failed to provide clear/timeous instructions and the solicitor wishes to withdraw from acting. In such cases, you need to be absolutely clear about your position and to issue a disengagement letter terminating your engagement and explaining (by reference to your terms of engagement) why you have decided to discontinue acting for the client. It is appropriate to refer to the time limits that you are aware of and the implications for the client of failing to comply with those time limits.

Sometimes there is a risk that an individual believes, erroneously, that you are acting for them in which case a non-engagement letter should be issued to make it clear that you are not acting. A recent example of this concerned a solicitor who received an unsolicited e-mail from a non-client seeking detailed advice in relation to a possible claim. In that case, the solicitor considered he could not act in the matter and it was appropriate to respond promptly stating that he was not taking on the case and stating the reasons e.g. insufficient time/expertise. The solicitor carefully explained that he was not expressing any view as regards the merits of the claim. In general terms, he drew attention to the existence of time limits and the possible consequences of failure to comply with them. The individual was advised to consult another solicitor.

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 (e-mail: Alistair.J.Sim@marsh.com)