Risky Business

31 July 2014

ACA – QLD/NT’s July lunch forum in Brisbane, titled ‘Risky Business – a claims overview’, focused on claims trends and included an interactive session about the process involved when you have a claim.

This session was presented by John Moore, partner of Thynne and Macartney lawyers, and Carl Brooks, partner of AB+M Architects. John has extensive experience in the area of professional Indemnity and Carl discussed the business aspects of managing the risk. 

The discussion included the following:

Claim types

  • Opportunistic claims
  • Misconceived claims
  • Valid claims
  • Combination claims – multi party
  • Contractual claims
  • Certification claims
  • Contract administration claims
  • Incorrect specification claims
  • Breach of duty of care (negligence)
  • Misleading and deceptive conduct
  • Assumed obligations
  • Recklessness

Loss types

  • Remediation / Rectification
  • Delay claims
  • Loss of profits / Consequential loss
  • Personal injury
  • Legal costs
  • Your costs – not recoverable
  • Human costs
  • Reputation

Claim trends

  • Impact of the GFC
  • Cutting costs
  • Reduction in gross fees
  • Staffing levels still economically balanced
  • Risk – spreading yourself too thinly + unexpected:- staff sickness + holidays + LSC
  • Less experienced staff (less cost) require more supervision
  • Less experienced staff at greater risk of errors if unsupervised
  • Will your remaining staff be poached when work increases?
  • Will you be able to secure experienced staff when you need them?

Recent observations

  • Careless mistakes – leading to very large claims
  • Work not being checked – otherwise obvious mistakes being missed
  • Directors having to step up at coal face – but cutting corners
  • No retainer agreements – lack of definition of what was required
  • Working outside your expertise of competency
  • Forgetting about the basics
  • Not bothering to confirm important matters in writing – leaving yourself exposed
  • Understaffing – no capacity for mentoring, which leads to mistakes and claims
  • Undercutting fees – not allowing sufficient margin for jobs – why work for nothing?

And, lastly, a very important risk management tip in relation to the signing of design and inspection certificates … READ CAREFULLY BEFORE YOU SIGN. 

comments powered by Disqus