How to manage dabbling risks and avoid claims
The modern solicitor must be many things, adding value wherever possible for their clients. But the temptation to take on work outside their area of expertise can lead to costly mistakes, warns Lockton
In the era of management information and data-driven decision-making, the modern solicitor must be many things. It isn’t enough to give clear advice; the industrious solicitor is supposed to have a can-do attitude, adding value wherever possible. This can lead to a temptation to take on work outside your area of expertise.
Below, we examine the risks when ‘dabbling’ in unfamiliar territory.
What is dabbling?
The distinction between acting at the limits of your expertise and overreaching can be opaque. Consider these examples:
- A solicitor acting in a different area of expertise, but within the same specialism. For example, a specialist in fatal accident claims assists a client to defend an industrial disease claim. The applicable legislation may differ, but there is likely to be significant crossover in terms of the litigation process and strategy, including assessing liability, causation and quantum.
- A solicitor acting in a different specialism, but within the same discipline. For example, a personal injury solicitor provides advice to a client regarding a complex property recovery matter. Both are civil litigation matters, but there will be divergence in lifecycles and applicable time limits. Some overarching principles may be applicable to both, but more technical and procedural nuances creep in.
- A solicitor acting in entirely different disciplines. For example, a commercial litigation solicitor advises a private limited company on how to transition into a public limited company via an initial public offering (IPO). In this instance, the solicitor is acting in two distinct areas of law. The applicable legislation, accepted practice, instruction lifecycle and client expectations could be vastly different.
Any of these examples could be dabbling, or they might not be. Each client engagement turns on its own circumstances, which will include the capabilities and experience of the solicitor acting.
Dabbling and professional negligence claims
Dabbling can lead to mistakes, from incorrectly interpreting legislation to missing a deadline. As such, the unwitting solicitor can easily find themselves facing a professional negligence claim.
Claims by clients are commonly based on the express and implied terms of the contract between the client and the solicitor. Alternatively, some claims are based on the alleged professional negligence of the solicitor. In both instances, solicitors are assessed on whether they applied the standard of care to be expected of a reasonably competent and careful practitioner versed in the given area of law.
In the event of a claim, your firm will probably have to pay the self-insured amount and deal with the likely increase in the following years’ premium. Your insurance must be sufficient to cover the value of any potential claim, and should be kept in place until the risk of a claim subsists. Even if a claim is ultimately unsuccessful, you will spend time defending it.
There are also the reputational and client retention implications. Unsurprisingly, most clients turned claimants take their future business elsewhere.
Complaints to the Solicitors Regulation Authority and Legal Ombudsman
In certain instances, dabbling may also constitute a breach of a solicitor’s professional obligations. This could form the basis of a complaint to the Solicitors Regulation Authority (SRA) in cases of alleged misconduct by solicitors, and/or Legal Ombudsman (LeO) for disputes about case handling and billing.
As per Code 3 of the SRA’s Code of Conduct for Solicitors, RELs and RFLs, solicitors must maintain their competence to carry out their role, and keep their professional knowledge and skills up to date. They must also consider and take account of their clients attributes, needs and circumstances. It would be improper for a solicitor to agree to act where they consider the service to the client could be inadequate owing to lack of knowledge or experience.
A client is entitled to make a service and/or conduct complaint against a solicitor or firm of solicitors. The service elements of any complaint will be investigated by LeO, and an upheld complaint can lead to:
- A reduction or refund of fees;
- Compensation for loss or inconvenience; or
- A requirement to carry out additional work to correct what has gone wrong.
The conduct elements are investigated by the SRA and can lead to sanctions affecting the solicitor personally, such as a requirement to pay a fine or compensation, or being censured, thus restricting their ability to practice.
Mitigating the risks of dabbling
There are laudable reasons that solicitors may consider extending their experience. When done in a controlled way, and with the appropriate safeguards in place, this may even be encouraged. Steps to mitigate risk include:
- Conduct a risk assessment. Before taking on any instructions, consider whether you have the legal knowledge, skill, and experience carry out the work. Consider whether you or your firm usually carry out work of that nature.
- Consider your risk appetite. Think about the extent of the risk you are taking and if it aligns with your firm’s risk appetite. If the scope or value of the transaction falls outside your firm’s usual parameters, it may expose your firm to new risks not anticipated in the current risk management plan. Consider that an instruction may become more complicated as it progresses.
- Balance risk versus reward. The expectation of a reward should not cloud your judgement. Acting beyond your ability for a potentially large fee could be counterproductive. Conversely, the risk is no less just because there is little or no fee taken (for example, a favour for a friend).
- Provide adequate supervision. A solicitor may be able to take on work outside their usual remit if they are adequately supervised by a colleague in their own firm, another firm, counsel, or an independent expert. Supervision should be more than superficial, involving case reviews and readily available guidance. Everything should be documented to demonstrate the exercise of reasonable skill and care.
The above is adapted for England & Wales from an article produced by Lockton in conjunction with Alan Eadie and Stuart Craig at DAC Beachcroft Scotland, and first published in the Law Society of Scotland Journal.
