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Loss Prevention Tip #29

Loss Prevention Tip #29: Properly Documenting Files

One of the most important things a lawyer can do to avoid an insurance claim is to document client files properly. Without documentation, errors or misunderstandings can occur that give rise to a claim.

Claims statistics for your Lawyers’ Insurance Programme indicate that poor communication with clients and others, failure to confirm or follow written instructions, and disputed instructions, are causes of negligence claims in all areas of law. To avoid such claims, you must constantly strive to ensure that what you have said and what the client has understood are one and the same thing. Developing the necessary discipline to document your files properly will make it possible for you to avoid being the subject of this type of a claim. Here are a few tips:

  1. As the Lawyers’ Insurance Programme has stated many times, begin your file with a written retainer agreement. Clearly and accurately communicating in writing with a retainer agreement will help control your client’s expectations. The retainer document should identify who the client is, what the terms of your engagement are, what you are retained to do, and the agreed payment arrangements.
  2. Every communication, meeting, telephone conversation and telephone message received or left should ideally be recorded in a note to the file. Notes should also be made when you are giving instructions to your office staff or making decisions without access to the complete file; you may otherwise forget specific instructions or other important information from a client or about the file.
  3. Written notes regarding oral communications may help reduce misunderstandings and the lawyer will be in a position to defend with certainty and conviction if a claim arises. Ideally, the author should be identified. The note should be dated with the time and year indicated. The note should be legible. The note should be comprehensible to others. A note to file should be understandable in 3, 5, 7, or more years from writing. The note should indicate the duration of the meeting or conversation and the presence of any other person. The note should state the material facts, the advice given and/or what must be done and within what deadline. Make sure that all your staff (receptionists, assistants, junior lawyers, articling students, and so on) document the file in the same way.
  4. You should not rely on your memory or the belief that you have confidence in the client. Furthermore, it is highly possible that even an informed client will swear with certainty, and without being dishonest, that they do not remember a given conversation, that they did not understand the conversation, or that they remember something completely different from what the lawyer remembers about the conversation or conduct of the case.
  5. For the sake of the client and that of the lawyer, the file should therefore provide a complete picture of what took place. It is possible that the lawyer will not be the only one to work on the case. Clear and precise notes will allow someone else to continue to work on the file, even in the lawyer’s absence.

It is surprising the number of insurance claims that are essentially based on a question of credibility regarding what was allegedly said by the lawyer or by the client. Misunderstandings between lawyers and clients, poor management of a client’s expectations and poor communication by the lawyer can generate a perception in the client’s mind that their case has not received the required attention and that the lawyer has committed an error.

Keep in mind that claims can arise long after the work is completed. From a professional liability viewpoint, following these loss prevention tips might have a major and beneficial impact when defending a negligence claim.