Why Professionals Should Have a Litigator Review Their Client Contract Every Year

Professional indemnity, professional retainers and liability…

I’m a litigation lawyer, however, I spent much of my career drafting contracts, which I didn’t always love… I thrive on the pressure and love the challenge of litigation.

That said, drafting contracts taught me a lot about risk management, perceiving uncertain events and creating solutions.

Litigation, however, is different. It’s dealing with known facts and circumstances and setting a strategy to get an outcome.

So, if you take out professional indemnity insurance like all professionals do, you need to manage your liability risk and remember this is not just about the professional indemnity terms and conditions in the policy.

A big part is about your liability framework which starts with your contract with your clients.

You know what I mean? I am talking about your terms and conditions, your professional retainer, your cost agreement and disclosure, your contract, your agreement, whatever you call it. I’m talking about the legal terms that make up the contract with your client.

And don’t tell me that one doesn’t exist because there’s always one, maybe it’s written, oral or both and there are implied terms too…always!

So my question to all professionals is:

• do you update your client contract annually?
• do you have different contractual terms to suit different work?
• does your cover letter or scoping letter properly define the work that you’re doing and what you’re not?
• does your service delivery and payment process consistently follow the contract?

I see so many commercial lawyers without litigation experience drafting contracts that are so tight, the terms are never going to be enforceable, the terms are clearly unfair and there are many other reasons why for example limitations of liability won’t be enforceable.

My advice to all the professional indemnity insureds out there is to get a litigation lawyer experienced in your specific industry sector to review your contract AND do it annually.

Feel free to reach out to me for building professionals - Blair@bulawyers.com.au

Or reach out to your insurer - they can refer you to one of their lawyers.

PLUS - What better way to show your insurer that you’re managing your own risk and protecting them.

After all, give your insurance brokers something to work with, give your defendant insurance lawyer a framework to protect you.

I am a specialised lawyer who deals with denied professional indemnity claims and defendant litigation. I also act for plaintiffs so I know what succeeds in litigation.

Remember commercial lawyers or front end lawyers are experts in contractual drafting and negotiation.

But remember this, it’s litigators who know how things go wrong and what really helps when you are at the coal face of litigation.

If your insurance renewal is upcoming, reach out, not one week before renewal but a month or more is optimal.

This article is a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Tagged as:

• professional liability
• insurance law
• contract law
• litigation