If you’re a freelancer or contractor who gives free advice to friends or other casual contacts, you’d better make sure it’s well-placed.
Otherwise, if your advice turns out to be misplaced, you may find a solicitors letter on your doormat detailing how you’re being sued for negligent advice and guidance!
The reason you’re being sued in such circumstances is because you’re presumably a professional in the relevant field. As a result, the person who receives your advice naturally assumes that it is correctly given and takes it as gospel. So, when your advice turns out to be wrong – and the friend suffers financially as a result – it is you who is at fault!
#####Insurers [Blyth Valley](http://www.blyth-valley.co.uk/Blyth-Valley-Insurance.html) offer a very useful real-life case study which shows how such situations can develop. All names have been changed…
Jane Brown has just purchased Professional Indemnity insurance, though she is not entirely sure she needs it because her client is a sweet old lady and a friend of her mum’s (Mrs Smith). She just wants plans for an extra ground-floor room for when she won’t be able to manage the stairs any more.
####Six months later…
Jane is in a pickle. It turned that her client loved her drawings, and asked her if she knew any reputable builders to make the designs a reality. Jane recommends a building firm to her. Mrs Smith takes her advice.
And this is where things go wrong.
It turns out that the building company took the money up front, left a half-built extension – condemned unsafe – and scarpered with Mrs Smith’s £25,000. And it’s all Jane’s fault!
####A month on…
Jane receives a letter which details how Mrs Smith is suing her for £25,000 plus an extra £20,000 for emergency demolition and inconvenience.
That small favour for her Mum’s friend has landed her in big trouble. By innocently recommending a not-so-innocent fraudster Jane has inadvertently breached her duty of care.
####Just a few months later…
As Jane has got herself PI insured, she gets a solicitor appointed for her (organised by the insurance provider) and the claim is settled at £35,000. In other words, Jane’s insurer has paid £35,000 leaving Jane to pay the rest (£10,000).
####The moral of the story?
Being friends with a person, doesn’t mean they won’t sue – their personal or commercial circumstances may mean they have to.
Being a professional means the law views you as having a degree of expertise greater than the man in the street. Even if you give advice for free, you can still be held liable for the outcome of that advice. So if you make a recommendation, do your homework first.
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[Blyth Valley](http://www.blyth-valley.co.uk/Blyth-Valley-Insurance.html) specialise in Professional Indemnity insurance for freelancers and contractors.
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Photo by Mike McCaffrey – CC
