Claims arising from circumstances where a solicitor fails to issue proceedings within the time allowed by the Statute of Limitations are a common type of claim made against law firms. Such statutes are enacted to protect people against claims made after disputes have become stale, evidence has been lost, memories have faded, or even when witnesses have disappeared.
Now, we’re not talking about the most riveting area of the legal profession here, but these statutes are significant and should be an important consideration for solicitors when they’re thinking about professional indemnity (PI) coverage. No one is immune to forgetting a date – it could happen to anyone.
An easy mistake
Our own data tells us claims can be particularly prevalent in the area of personal injury. On occasion, clients are not always overly cooperative when it comes to providing all the relevant information and documentation to proceed with their claim, and with comparatively short limitation periods - two years in Ireland and three years in England and Wales - time can march on very quickly where a client or indeed a solicitor is not engaging in the process.
It can be during these time lags when attention to time periods can slip. Lawyers, solicitors and other legal practitioners can have any number of things come across their desk, on any given day – you’re very busy people. However, all it takes is one simple oversight, whereby the solicitor fails to properly calculate the time period and finds that when he/she goes to issue proceedings, the time allowed under the statute of limitations has expired. The end result? That solicitor is exposed to a possible claim being made against them.
The technicalities
Under section 7 of the Civil Liability and Courts Act 2004 in Ireland, a Plaintiff has two years from the date of the accident which allegedly caused their personal injury to issue proceedings against the party/s he/she feels is responsible for the accident and resulting personal injury.
However, section 50 of the Personal Injury Assessment Board Act 2003 provides that the time in relation to the statute of limitations is “frozen” from the date an application is made to the Personal Injuries Assessment Board (PIAB) until six months after the date on which PIAB issued its authorisation, enabling the Plaintiff to issue proceedings formally in the Court office. This “frozen” period can cause issues for practitioners.
The key is to avoid such circumstances from occurring. Claims in professional negligence in this area can be difficult to defend where the breach of duty to the client is clear in most cases. However, there are several risk management steps that can be implemented into the workflow process to help manage this risk and reduce the likelihood of facing a claim. Having insurance is only one part of the solution; your risk management strategy will be your first line of defence.
Risk management measures
- Ensure that all limitation dates are recorded both in the relevant solicitor’s diary and in a central diary which is checked every day. This should ensure that a limitation date is not missed in circumstances where the solicitor might be out of the office. Responsibility for checking the central diary should not be the sole responsibility of one person who will also be out of the office at various times. It could be linked, for example, with opening the post each morning – whoever opens the post also checks the central diary and alerts the solicitor in question or another solicitor if necessary.
- Diary reminders should be included - not only for the limitation date but also in the lead up to it - to ensure that there is sufficient time to deal with all action points prior to the limitation period expiring. An example would be including reminders on the last date before limitation expires, one week before, two weeks before and one month before.
- Clients should be advised in writing in the lead up to the expiration of the limitation period, warning them of the last date upon which the application can be made, what steps need to be taken which require their input and the consequences of the limitation period expiring without the relevant application being made. If there is a clear note on file of this advice, it will be difficult for a client to argue that their solicitor was responsible for allowing the limitation period to expire if the real issue was their failure to provide instructions.
- Warn about the consequences of not providing the necessary materials, including instructions, a medical expert report fee or any other relevant papers, and the effect this will have.
- Use clear language. For example, do not say the ‘Statute of Limitations’ as lay people will not understand this. Be clear that failure to comply will mean that the case cannot be pursued.
- If the case has difficulties in liability, it is useful to set out those difficulties in writing to the client. What may have been a weak case in the first instance tends to become a stronger case in professional negligence against a solicitor where a court will not look into the liability issues in the underlying case in as much detail, and where the focus is on the negligence on the part of a solicitor. Claims in relation to missed limitation periods are framed on the basis that the client has lost the opportunity to pursue their case. Any contemporaneous advice in relation to the weaknesses in the case will be useful in keeping the level of the professional negligence claim to a minimum.
- It is of utmost importance to keep detailed attendance notes of all meetings and telephone conversations with the client. If advice was provided in relation to limitation but not recorded accurately on the file, it puts solicitors in a much weaker position.
By Howard Gras, Class Underwriter, Professional Indemnity
Email: [email protected]
Direct: +44 (0)20 77436824