“Delay” and “SRA Investigations” Why you need to pay them some attention!
This month, we look at a couple of issues. The first, delay, has at some point probably impacted all law firms. The second, SRA Investigations, has perhaps seen more prominence in the press
lately in view of a few high profile cases.
Both topics to keep an eye on, so here we highlight why you might pay them some attention.
All solicitors will be aware as to the issues that can arise out of ‘delay’, for example, actions may be struck out, transactions compromised, added expense, unhappy clients and missed opportunities and referrals to the Legal Complaints Service to name a few.
Each one of these issues could have the end result of a significant claim on your Professional Indemnity Insurance (PII) policy if allegations of professional negligence against your firm are proven.
Can you prevent this?
We would acknowledge that where your client causes the delay then that can make things difficult but even here, could you do more? In particular, have you made your client aware as to the reasons why you need certain information from them and the risks that might arise if they don’t themselves comply with your requests in a timely manner? Do you require your client to promptly inform you of any change in their contact details? If you do, how is this recorded in your own case management systems?
What about delays caused by yourselves? We don’t propose to tell you what you already know here. However, we can warn you against the financial costs faced by your firm should your delay cause an action for significant damages – a large payment sitting on your PII record will, of course, have a negative effect on the premiums you are subsequently required to pay. In addition, have you considered the indirect costs to you as a practice in dealing with the claim itself? Many such claims will result in the firm’s focus being very much on dealing with the claim itself, with a resultant loss of billing time and general development of the business.
This is intended purely as a snapshot of the problems ‘delay’ might incur. Please contact MFL should you wish to discuss how we might be able to tackle some of the issues and thereby limit any potential adverse impact upon your PII arrangements.
Management Liability Insurance (including SRA Investigations Costs)
For some time now, MFL Professional have sought to highlight the potential need for this class of cover which can be purchased as stand-alone from your PII cover. This cover can offer the following protection for your firm’s principals, officers and managers as well as protection for the firm itself, perhaps best summarised as below:
- Cover for your COLP, COFA, MLRO amongst others for personal and other liabilities in running the practice.
- Allegations of wrongful acts relating to the running of the practice.
- Employment claims.
- Investigations into the affairs of the practice including forensic investigations by the SRA.
- Employee fraud and dishonesty.
The Law Society Gazette highlighted the need for this cover in their 26th June edition, with a focus on an SRA prosecution brought against a firm and certain of its partners, which whilst ultimately unsuccessful, nonetheless meant that the firm and its partners may likely have faced significant challenges with the costs involved in defending themselves in the absence of insurance cover being in place.
Please contact MFL should you wish to discuss how we might be able to assist further.