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Kishan Presentation on Professional Liability


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Kishan Presentation on Professional Liability

  1. 1. Welcome to the Presentation on Professional Liability Presenter - Kishankumar Solanki, BE, LLB, MBA, CCP, PMP, MIE, CEng, ACMA, FCCA, MRICS Contracts Manager
  2. 2. Before we begin...
  3. 3. Disclaimer Please note that views expressed during this presentation are own views of the Presenter and not necessarily that of Organizer (s). The Views expressed during this presentation are only for the purpose of academic discussions and creating general awareness about the subject matter. All Concerned are requested to seek appropriate professional advice before acting on the basis of this Presentation.
  4. 4. Contents Professional Services Profession Professional Professional Services Whom a Professional is Liable Liabilities/Risks of a Professional Contractual Torts – Negligence & Negligent Misrepresentation Fiduciary Duties What Professional can do to minimize Liability Risk Management Approach Risk Responses
  5. 5. Professional Services
  6. 6. Profession A vocation or occupation requiring special, usually advanced, education, knowledge, and skill; The labour and skill involved in a profession is predominantly mental or intellectual, rather than physical or manual. Examples: Law, Accounting, Engineering, Quantity Surveying, or Medical
  7. 7. Professional An Individual or a Firm engaged in a Profession and have: • Special Skills and/or Training – Predominantly Mental or Intellectual • Commitment for High Standard of Service – Not only to Client, but to the Community as a whole • Professional Membership – Adheres to Code of conduct, Continuous Professional Development
  8. 8. Professional Services Major Considerations are: • Competency • Duty of Care • Standard of Care • Fit for Purpose • Good Faith • Errors and Omissions • Conflicts of Interest
  9. 9. To Whom a Professional is Liable? A Professional is liable to Various Parties. • Clients – With whom Contract is made • Users – Whose requirements to be meet • Regulatory Bodies – For Compliance with Laws and Rules • Community – Who may be affected • Professional Body – to which it belongs • Employees – Who performs the services on behalf of Professional individual or films • Others – Whose interests are affected
  10. 10. Liabilities/Risks of a Professional
  11. 11. Contractual Primary responsibility is to Meet Contractual obligations: • Time of Delivery • Quality of Service • Other Functional Requirements • Indemnification for liability of other Party Failure to meet one or more contractual obligations may lead to Claim(s) for: • Delay Penalty or Liquidated Damages • Compensation for Injuries or Damages to the property • Compensation for Lost opportunities/Benefits • Reimbursement for additional costs sustained
  12. 12. Torts A “Tort” is a civil wrong – does not include breach of Contract or breach of Equitable Duties • Negligence – not meeting obligation of Duty of Care • Negligent Misrepresentation – Presenting incorrect information Type of Claims in Torts: • Injury or Damage to Property of Third Parties • Compensation for Additional Costs sustained by Third Parties • There may be Criminal Proceedings for Gross negligence causing bodily Injuries
  13. 13. Fiduciary Duties “A Duty to act for someone else’s benefit, while subordinating one’s personal interests to that of the other person. It is the highest standard of duty implied by Law.” Three Criteria: • Scope for Exercise of some discretion or power • Unilateral exercise of that Discretion or power to affect beneficiary • Beneficiary is peculiarly vulnerable to or at the mercy of Fiduciary Failure to meet the above obligations may lead to Claim(s) for: • Compensation for Financial Loss • Compensation for Lost opportunities/Benefits • Reimbursement for additional costs • Criminal Proceedings
  14. 14. What Professional can do to Minimize Professional Liability
  15. 15. Risk Management Approach • Be Aware of Various aspects of Professional Liability • At All Times follow High Standards of Professional Ethics & Conflicts of Interest • Identify Stakeholders • Understand the Requirements • Work out overall Risk Management Plan • Conduct Risk Assessment • Work out and Implement Appropriate Risk Responses
  16. 16. Risk Management Approach (Cont..) Risk Responses categories: • Avoid • Mitigate • Transfer • Accept
  17. 17. Risk Management Approach (Cont..) Avoid: • Avoid accepting Professional Engagements in Risks are beyond tolerance level • Terminate Engagements , if feasible Mitigate: • Negotiate Terms of Engagement Contracts before Accepting it • Continuous Professional Development • Update the Stakeholders and discuss any changes required • Follow the Professional Guidance and Practice Standards • Keep proper documentation on Decisions made with Key Stakeholders • Periodically Review the Effectiveness of Risk Management and Update it • Use Disclaimer notes on the Professional Work as appropriate
  18. 18. Risk Management Approach (Cont..) Transfer: • Obtain Appropriate Insurances viz. Professional Indemnity, General Third Party Liability, etc Accept: • Defend the Claims • Negotiate for Settlement of Claims • Pay the final settled amount
  19. 19. Any Questions?
  20. 20. Thank you