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Sorry: the hardest word, made easier

14 November 16

Does making an apology create difficulties in relation to Master Policy cover? This article exposes several myths concerning this topic, and highlights the effects of the Apologies (Scotland) Act 2016

by Lynne Cardow

Apologies: they don’t come easily to everyone, and it can be particularly hard to know whether it is right or wrong to say sorry when there is a legal or insurance aspect to consider. The link between apologies and admissions of liability is often misunderstood, but being aware of some of the common misconceptions can help you to navigate your way around potential problems.

1 Your insurers won’t let you apologise

Or in its more extreme form: You will be in breach of your insurance cover if you apologise. While this is a widely held view, it is simply not correct. The Law Society of Scotland Master Policy requires that “No admission offer promise payment or indemnity shall be made or given by or on behalf of the Insured without the written consent of the Insurers”, but nowhere does it preclude or prohibit an apology.

It would clearly be a bad idea – and indeed a breach of Master Policy cover – to barge in with a full and forthright admission of liability, together with an offer of handsome compensation. There is, however, nothing in the letter or the spirit of the Master Policy to prevent you from saying, sincerely, that you are sorry for the situation that has arisen and that you will do everything in your power to look into it and see that it does not happen again. If you are at the stage of considering saying that you are sorry for a situation that has arisen, this is perhaps also the best time to be notifying your insurers of the situation, if you have not already.

It is easy to see why there is often a nervousness about saying sorry, because it can be difficult to give a sincere apology without going the further step of offering to resolve the problem, which others might perceive as accepting responsibility for that problem. This takes us on to the next long-held misconception…

2 An apology is the same as an admission of liability

This has never been the case. And even if you might have thought so previously, the Apologies (Scotland) Act 2016, in its six short sections, now makes the position crystal clear: “In any legal proceedings… an apology… is not admissible as evidence of anything relevant to the determination of liability… and… cannot be used in any other way to the prejudice of the person by or on behalf of whom the apology was made”.

The Act – commendably concise and beautifully to the point – applies (with a few limited exceptions) to most civil proceedings, but only to apologies made after its commencement [finally set, after an amending order, at 19 June 2017]. It goes on to define an apology in uncontroversial terms, making it clear that by apologising, expressing regret, or undertaking to review the situation to prevent a recurrence, you are not assuming accountability.

3 Forget your apology – show me the money

This is not a complete misconception. An individual who considers that they have sustained a financial loss as a result of negligence is likely to seek some sort of compensation.

But as anyone who has ever participated in a successful settlement meeting or formal mediation will know, money is not always the answer, or at least the whole answer. As well as serving as a show of empathy and an acknowledgment that something has gone wrong but that lessons have been learned, a clear and sincere apology can, in the right circumstances, take the heat out of a potentially adversarial situation, allowing the parties to move towards resolution in a co-operative manner.

In addition to providing, in itself, a form of redress and giving closure to those affected, it can also translate into a reduction in any financial compensation sought and paid. Therefore, never underestimate the power, and the value, of a few conciliatory words.

4 If you admit liability, it’s game over

This is more complex. To tread beyond an apology into a formal admission of liability clearly breaches the general conditions of the Master Policy, and risks jeopardising your right to indemnity: not advisable. Be that as it may, unless the admission has specifically prejudiced the handling of the claim – for example if liability has been formally admitted where it did not in fact attach – insurers have committed within the contract not to avoid any claim on the grounds of the breach.

That said, the advice is always to avoid any formal admission without obtaining insurers’ written agreement in advance. In appropriate circumstances, that agreement will be given, enabling you to confirm the position to the aggrieved client while still safe in the protection of the Master Policy. If in doubt as to whether the terms of an apology may be straying into an admission of liability, be sure to clear it with insurers in advance.

5 Nobody can help you

The most dangerous of misconceptions. Approaching complicated issues of this nature alone is neither necessary nor wise. The Master Policy insurers and the brokers are always available to help in this sort of situation, as are panel solicitors where they have been instructed. The nature of that help can vary: sometimes it is to act as a sounding board in connection with a complaint or claim; at other times it is to review and revise a letter of apology which might (with insurers’ concurrence) extend to a careful admission of liability; or it might be to suggest that you step back altogether and leave it to external lawyers to assess the situation with a dispassionate eye. In a complex situation, two heads will always be better than one. By getting your insurers involved at an early stage, you are using the cover you have paid for all these years, and you will find yourself where many have been before you.

Making a mistake can be painful. Letting down a client is something no solicitor wants to experience. But sorry need not be the hardest word. And the Apologies (Scotland) Act 2016 makes it just that bit easier.

Lynne Cardow is an associate in BTO Solicitors LLP’s professional liability team. She specialises in defending claims on behalf of solicitors, accountants, surveyors, construction professionals and their professional indemnity insurers, both in the courts and through various forms of ADR.
This article is for general information purposes only and does not constitute legal or other professional advice. 

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