An open and closed case

It's surprising how often a well-managed retainer for a long-standing client can turn sour months, if not years, after the file was closed, simply because the practice did not have properly policed file closure procedures.


Professional indemnity insurers are more than familiar with claims resulting from oversights and omissions during file closure. Examples could include incomplete applications to court, missed dates for exercising options or cases where a file is closed on a seemingly abandoned matter without properly informing the client.


Procedures for closing files need not be onerous or time-consuming, but they are a useful safety check and can avoid storing up problems for the future. The following suggestions work well for many practices, but firms should develop procedures that work effectively for them.


Introduce peer-to-peer file checking before a file is closed and sent for storage. Check that no important documents remain unactioned, such as a signed application for a court order that has never been made to the court.


Where there are important documents on file, such as a will or property deeds, make sure that they are dealt with in accordance with the client's wishes. This may include returning the documents to the client or removing them from the file for separate, secure storage.


Where documents are stored separately, make sure that a note is added to the file clearly identifying what has been stored and where. Write to clients to make sure they are aware of where their documents are held.


In any event, a closing letter should be sent to clients, setting out clearly that a file has been closed and identifying any matters outstanding. This may include future important dates, such as a deadline to exercise an option. If it is outside your firm's remit to remind the client about a deadline or other outstanding matter, make this absolutely clear in the file closing letter. Always advise clients of the intended date of destruction of the file.


Return any personal documents and copies of any relevant documentation such as court orders or searches to clients.


Let clients know where their files are being stored and for how long they will be kept.


Finally, introduce a system of counter-signatures where the case handler and the fee-earner who checked the file both sign off the file. You will be surprised how asking people to sign for their work brings out an extra burst of diligence.


Establishing file closure systems may seem an obvious and simple procedure. Unfortunately, professional indemnity insurers frequently see negligence claims that could have been easily avoided if more firms had taken simple steps to ensure their procedures were watertight.


This column was prepared by AFP Consulting, a Division of Alexander Forbes Risk Services UK