Is your firm a risky business?
When it comes to the reputation of your business, knowing how to handle complaints is vital. A successful outcome is only likely if you and your company are fully equipped to deal with complaints effectively to mitigate the chances of them becoming something more serious.
Preparation is the key to preventing complaints and claims. The more time you invest now, the less likely your business will suffer. SBJ Professional is a specialist in professional indemnity (PI) insurance; therefore we can offer specialist advice on how your business can manage its risk.
Engagement Letter
This should clearly set out the scope of the retainer and be signed by the client prior to work commencing. Any changes should be confirmed in writing and signed by the client and stored on file. Ensure that all letters comply with the rules of your regulatory body. Where appropriate consider limiting your liability by agreement with the client.
Manuals
Firms should have manuals setting out the general practices to be undertaken by all staff dependant on the type of work they are doing.
General Procedures
General procedures should be laid out in manuals and should include a requirement that all telephone calls and meetings are recorded. In addition, where significant information and discussion has taken place, then it should be recorded in writing and sent to the client for agreement.
Diary Systems
A diary system should be in place for all files. Dates should be centrally logged so that all staff have easy access and if there are paper files, dates should be noted clearly on the front of each file.
Checklist
A checklist should be designed which is signed off by a Director and / or Senior Partner, and should be attached to each file. This will ensure consistency in the approach and serves as a reminder that all aspects have been covered.
Manage
Firms should ensure that there is adequate staff to cover the firms workload. Excessive workloads should be avoided as this increases the risk of rushing and mistakes can be made. Staff should be actively managed and this can be undertaken through training, appraisals, development and accessibility to senior people.
It is necessary to ensure continuous communication with the client and monitor any issues. There must be awareness of who the client is and where claims may arise from. An awareness of the client’s history, especially with other firms is helpful. It is necessary to ensure that any work undertaken has the appropriate fee level to cover the scale of the instruction. Only take on work that you are skilled in and qualified to undertake.
Refer
Do use colleagues to take a second opinion, especially for areas outside your scope of experience. Specialist advice should be sought where necessary. Documentation should be checked at appropriate levels. (An internal and external audit system should be used so that reviews can be done to ensure everything has been handled correctly).
Documentation
Full and detailed file notes should be kept. This applies to records of advice given and instructions received. Files should be clear and complete so that they are easily understood. Claims can sometimes take a long time to materialise and if files are well maintained it will be easier to deal with potential claims. It is necessary for letters of engagement or retainers to follow the same format across the board. Terms and conditions should be clear, especially for the client, and any ambiguity should be avoided.
Complaints Procedure
A director or senior partner should be appointed to handle any complaint. Efforts should be made to resolve the complaint within 24 hours. This is best achieved by the use of the telephone or face to face discussions if the complaint is not initially resolved. Obtain full details in writing. Respond quickly in writing fully setting out the complaint procedures and giving timescales as to when a decision will be made. If the timescales could be extended, inform the complainant and give reasons.
A final decision letter should be issued as soon as the investigations are complete and a full explanation should be given as to how the decision has been reached and any relevant documentation enclosed.
Claims and Circumstances
Firms should not handle claims, regardless of how simple or straightforward they are, all matters that may give rise to a claim should be reported to insurers immediately.
A notification form should be completed and all relevant documentation and correspondence should be attached. This should include any letters from the claimant / client which should not be responded to without the insurer’s prior approval.
Any letters to the claimant / client should be drafted and submitted to insurers for approval.
No admissions of liability or offers to settle should be made without insurer’s prior approval.
The identity of the firm’s professional indemnity insurers should not be revealed in any circumstances. Remember any late report of claims / circumstances will be in breach of the policy conditions and insurers may refuse to deal with the notification, especially if there has been any prejudice.
So, are you doing all of the above? If not, take our advice and start now. Once you have completed the preparation, you are doing all you can to reduce risk. Combine this with the strong relationship between you and your broker, your company is in a strong position to face the future.
For further advice or to talk with a specialist professional indemnity broker complete our contact us form and we will contact you.