Safe as houses

Code Red magazine talks to Dinesh Raja, Managing Partner at law firm Bowling & Co, about laying down the law on risk

How has your attitude to risk changed over your time at Bowling & Co?

While the old adage that you get wiser as you get older is certainly true, the types of risks and the potential for claims arriving from new angles continue to develop. The constant development of protocols to measure and protect against potential pitfalls is part of the legal profession’s culture, and my attitude to risk is grounded in that.

At Bowling & Co, we encourage a collegiate atmosphere when a potential risk is identified and that is a great asset. The availability of the team at Travelers is also useful. We try to arrange a risk conference between Travelers and all fee earners on an annual basis as this affirms to fee earners that the insurer is approachable and is there to help.

What are some examples of best practice at Bowling & Co that could be useful to risk managers from other businesses?

Two good examples are what we call ‘day books’ and ‘team copies’. The ‘day book’ is a system where we encourage all staff to record their tasks, meetings and attendance notes in a journal. To be able to reproduce such information at a future date is of great benefit when trying to recall something vital, however insignificant at the time.

On the other hand, ‘team copies’, which are simply an extra copy of all the letters that are sent out by mail, help management to monitor activity in the firm; keep abreast of any compliance issues that might come to light; and ensure continuity of house style in the advice we give.

As the commercial property industry returns to growth, what do you envisage being the potential exposures?

Prior to the financial crisis, some commercial portfolios may have been hiding potential risks associated with overzealous valuations and high gearing. So, where there may have been defaults on loans and repossession, lenders will be reviewing their loan books to look at any cases where they feel they can pursue third parties – this will include those law firms that acted on such transactions.

Where are the risks most unique?

The risks are most unique in the healthcare market. Some owners who have over-borrowed or remortgaged to finance care-home extensions have faced difficulties recently as a result of an increase in compliance under health and safety and care standards legislation.

There is also a big risk to those borrowers who are likely to be in breach of their financial covenants, as banks are under pressure to improve their balance sheets and are looking at ways to decrease their exposure to high loan-to-value loans. This is particularly true in situations where the borrower has been unable to let the development in time.

This article first appeared in Code Red, Travelers insurers risk management magazine.