The time it takes to discover a mistake, error or negligent act can vary hugely. We have seen claims which are notified almost immediately after the negligent act took place, to the other extreme where one matter (residential conveyancing) was reported 38 years after the work was carried out. Those claims discovered quickly have the potential for rectification however social engineering fraud claims, where money is wired to an imposter purporting to be the client, can be difficult to mitigate in terms of retrieving the funds, as they are often swiftly transferred to multiple accounts overseas, never to be seen again. Claims which arise years after the fee earners have left or from work no longer carried out by the firm, can be particularly difficult to defend: lack of information, attendance notes or files destroyed or lost, mean firms are left floundering to defend themselves.
Claims arising from work undertaken by predecessor firms which have been acquired can be even more challenging to defend and highlights the importance of carrying out thorough due diligence when looking to acquire another firm. Firms should consider, for example, a sample of files from different departments and include a selection of closed files as well. Were the files closed after completion of a standard file closure check list, especially in conveyancing where many claims arise from poor post completion procedures.
Click on the right hand side to download the full article.