West Midlands-based professionals are risking losing legal claims by not keeping records for long enough, according to a leading litigation expert.
Neil Williams, partner and head of the dispute resolution and litigation department at Black Country law firm George Green, says too many professional firms are disposing of their client files too soon.
"It is possible for clients to seek redress against solicitors, a ccountants, surveyors, architects, engineers and other professional advisers up to 15 years after an alleged negligent act or omission," said Mr Williams, who is based in the Cradley Heath office.
In a survey of West Midlands' professional firms, George Green found that files were retained on average for only six years.
"The time for which records are retained varies from firm to firm, with solicitors being most scrupulous about their retention," said Mr Williams. "However, there are other professional firms which get rid of old client files after only three years.
"A seven year cut off point should avoid claims for breach of contract, which can generally be brought up to six years after the breach, but in some cases this can be longer, and negligence claims can have up to a 15 year time span."
According to Mr Williams, there are many instances where it can take a long time for negligence or omission to emerge.
He said: "A claim for a problem with a residential property transaction might only come to light when the purchaser tries to sell on the property some years later. We are aware of one case where a solicitor did not make it clear that there was a public right of way across a property, which made it impossible for his client to subsequently sell the property.
"We are also aware of a case where an insurance broker, having reviewed his client's insurance policy and changed insurer, failed to tell his client about a new and onerous warranty provision which had to be complied with. This only came to light when the factory burned down a few years later and the insurance company refused to pay, leaving the broker liable to meet his client's claim for compensation."
Mr Williams believes a well policed internal risk management system can do much to remove the threat of such claims.
He said: "As far as retaining files is concerned, the best managed firms will have used their risk management procedures to assess the likelihood of any claim being brought before they get rid of any records, in order to balance storage costs against any future claim.
"As with the case of the insurance broker, many claims are for simple carelessness, alternatively for missed time limits or omitting to do some-thing by a certain date, which then cause substantial loss to a client. Firms should ensure that procedures are in place to ensure that key dates are adhered to.
"For example, a solicitor or property agent's failure to exercise a break clause in a contract can be an extremely costly mistake, landing the firm or its insurers with paying the rent on the client's unwanted property for a number of years."
Mr Williams says it is important that the scope of a firm's work and its potential liability is made clear to its client in its terms of business. Charging structures and payment terms should also be clear.
"Disputes over fees and costs are quite common. If they are set out clearly at the beginning of a contract, then this leaves less room for argument later," said Mr Williams.
"Ensuring risk management procedures are in place and files are maintained and safely stored should mean firms spend less time on dealing with complaints and, if they do arise, they can be more easily sorted out."