Thursday, October 17, 2019

Acts/omissions that could lead to a claim for negligence

An area that you will need to review is how you deal with self-interest conflicts arising out of identified acts/or omissions that could lead to a claim for negligence.

The Howell Jones case has set a clear precedent, that in such circumstances you should advise the client to seek separate independent legal advice and that you can no longer act for them.

Professional indemnity insurers have taken the view that you should not continue to act in such circumstances, but that it is a final decision for you and your firm to make; this is an interesting position to take as it could potentially leave your firm exposed if you decided to continue acting. For example, the insurer could reserve its position because you went against its advice even though it said it was your decision to make!

If the Howell Jones precedent remains in place beyond 25 November, the SRA’s position in the case will conflict with its own Standards, in that 7.11 states:

“You are honest and open with clients if things go wrong, and if a client suffers loss or harm as a result you put matters right (if possible) and explain fully and promptly what has happened and the likely impact.”

There clearly needs to be some clarity from the SRA on this issue, and this may come after a meeting the Law Society is apparently holding in November to determine what guidance it will provide to the profession; only time will tell!

For users of the Riliance Risk and Compliance system, the risk register and PII claims module should be used to manage issues of this type.