Confirm when discrete tasks are completed in general files

27 July, 2018

One risk of running ‘general files’ is failing to confirm in writing when your obligations in connection with discrete tasks are to be treated as concluded. If you fail to clarify this, you might remain ‘on risk’ for issues beyond the discrete task.

In one claim, the practitioner acted for the owner of a nursing home over several years regarding the lease of the freehold to the operator of the facility. From time to time the client would instruct the practitioner to undertake discrete tasks and cease providing instructions when the issues with the operator were resolved.

In one such instance, the client and the operator were in dispute over a number of issues. The practitioner had limited involvement in the dispute but was instructed to write a letter to the operator to obtain a copy of the certificate of currency of insurance. He sent the letter but did not inform the client when the operator failed to respond. He did not regard himself as having any ongoing obligations or instructions.

Sometime later, the client and the operator attended a mediation without the practitioner and resolved their dispute. The settlement terms, which the practitioner saw, did not make any mention of insurance issues. The practitioner did not recall contacting the client to find out if it had obtained a copy of the certificate of insurance. He had taken the view that his services were no longer required.

Five months later, an invitee sustained serious injuries in an accident on the premises leading to a large claim for damages against the client and the operator. When the client discovered it was not a listed beneficiary under the operator’s public liability insurance policy for the relevant year, it alleged the practitioner failed to ensure it was so insured. It also alleged the practitioner failed to advise it to amend the lease to reflect that the client was relying on the operator to chase up the insurance and obtain the certificate.

When the practitioner thought his retainer had ended, he should have sent a letter or email to the client confirming he would perform no further work on the matter unless further instructions were received. In the absence of such a communication, a court could have concluded the practitioner should have taken further instructions as to whether the client wanted him to take further steps regarding its insurance.

For risk management purposes, always record the end of every discrete task in general files in writing even if you do not expect to be paid for the communication.