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Time to tackle time bar

1 June 00

A "belt and braces" is recommended in order to minimise the risk of critical dates being missed

by Alistair Sim

Back to the issue of time bar claims again. Why? Because there are various types of system and procedure that can help to minimise the risk of these claims occurring, yet time limits are still being missed. The explanation? There are various possible explanations including the following -

  • The relevant time limit isn’t known.
  • The date of expiry of the time limit isn’t correctly identified/verified.
  • The relevant date isn’t diarised.
  • There isn’t a fail-safe to catch the cases which might otherwise slip through the firm’s diary system.    

Analysis of the claims experience shows most of the time bar claims dealt with by the Master Policy insurers arise through the failure to put a system of control in place or through the failure of the system that has been put in place.

The relevant time limit isn’t known

Very few time bar claims arise because of an error in relation to the relevant prescriptive period.  While there have been one or two cases in the past involving special prescriptive periods - accidents at sea or on aircraft, for instance - practitioners are generally alert to these specialities.

The date of expiry of the time limit isn’t correctly identified

Even if the relevant period is properly understood, there is still the risk of a mistake being made about the date from which time begins to run.

One of the risks here is that an incorrect assumption is made at an early stage of a claim and that assumption is never verified/challenged thereafter.

Because so much rides on that piece of information being correct, it must be worthwhile incorporating in appropriate checklists a prompt to double check the information on which the calculation of the expiry of the prescriptive period has been made.

If there is a colleague who could double check that for you so much the better.

The relevant date isn’t diarised

If the date isn’t entered into an effective diary system, then there is an enormous risk that the time limit will be overlooked and the deadline missed.  While concentrating on the merits of even a modest caseload, there is quite enough to consider without relying on one’s memory to ensure that deadlines aren’t missed.  Whether manual or computerised, it is essential for everyone to operate an effective diary system for managing dates and deadlines.

There isn’t a fail-safe

The insurers, in giving risk management feedback on their experience of handling claims, refer to instances of time bar claims where the solicitor has a diary system but the particular case slipped through the net. What can you do about this risk?  Is it a risk that simply has to be lived with?  No.

Experience in this area of risk shows that we cannot safely rely on a single line of defence but need to work on a ‘belt and braces’ basis by having a combination of various systems and procedures to operate as a reliable fail-safe.

What for instance?  The following are examples of systems and procedures which practitioners have found practical and effective -

File reviews

Practitioners have spoken of the benefits to be derived from conducting a regular review of all files for which they are responsible on a regular, rolling basis.  That ensures that cases which may not have been actioned for a period of time or not diarised receive appropriate action before expiry of any time limit.  This also helps to ensure that clients are kept advised of developments or the reason why there have been none.

File audits

The independent review by a colleague of a random sample of files is seen by some firms as useful as a spot check.  It is not suggested that the colleague undertaking this sort of spot check should be exhaustively reviewing matters in detail, simply that the file is up to date, that it appears the client is being kept regularly advised and that critical dates have been properly identified, drawn to the client’s attention and diarised.  It is suggested that a checklist approach might be used.  

Case review meetings

For any case approaching the prescriptive date, a case review meeting could usefully be held to ensure that there is a plan of action to ensure that appropriate steps are being taken to raise proceedings timeously or, if the problem is that the client is failing to provide information or instructions, that the client is being warned of the consequences and advised that the firm may have to withdraw from acting.

Managing the client

The client needs to be made to understand at the earliest stage that failure to take particular action in advance of a specified date will have serious and irretrievable consequences for the client. The client needs to be told that he will require to provide information and instructions timeously.  These warnings need to be confirmed in writing, perhaps in the client engagement letter.  Some firms adopt the practice of requiring clients to sign and return the firm’s explanatory, warning letter by way of confirmation that the clients have been made aware of the critical dates and the implications of failure to comply.

Checklists

To ensure that appropriate warnings are communicated to the client at the earliest stage, some find it beneficial to use a checklist or aide memoire as a prompt.  Checklists can also address the various other issues described above.  If checklists are devised in a particular format, they can be used in the process of regular file reviews and independent file audits.

Summary

Consider whether your own systems and procedures put you in control of timescales and time limits by ensuring that you -

  • identify the prescriptive date at the outset
  • double check the date, ideally having it confirmed by a colleague
  • establish a mechanism (aides-memoire/checklists, for instance) for identifying and verifying special time limits e.g. for aviation, maritime or international claims
  • note the prescriptive date on the file and in diary systems and have countdown dates diarised
  • make diary entries for all court dates and appropriate number of days in advance thereof
  • keep a central diary as back up for all court dates
  • hold case review meetings on a regular basis, particularly for those cases approaching the prescriptive date
  • •set up file review and independent file audit systems and keep a log of reviews/audits conducted
  • keep in touch with your correspondent and never just assume that your correspondent is keeping the time limits in mind
  • advise your client of the consequences of their own delay
  • consider withdrawing from acting if client persistently fails to give instructions

The Risk Management Flowchart and Model Procedures issued by the Society in March 1999 provide guidance on critical date diary systems and suggests different formats of diary system.  There is guidance too in ‘Better Client Care and Practice Management’ and ‘Ensuring Excellence, Even Better Practice in Practice’.

There is a lot at stake.  Although claims should be covered under the Master Policy, the firm will incur various uninsured losses. In addition to the management time involved in dealing with a claim, various other costs could be incurred including a risk management deductible and premium loading.