1. Welcome
to
the Presentation
on
Professional Liability
Presenter - Kishankumar Solanki, BE, LLB, MBA, CCP, PMP, MIE, CEng, ACMA, FCCA, MRICS
Contracts Manager

2. Before we begin...

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. 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. Professional Services

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. 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. Professional Services
Major Considerations are:
• Competency
• Duty of Care
• Standard of Care
• Fit for Purpose
• Good Faith
• Errors and Omissions
• Conflicts of Interest

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. Liabilities/Risks of a Professional

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. 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. 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. What Professional can do
to Minimize
Professional Liability

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. Risk Management Approach (Cont..)
Risk Responses categories:
• Avoid
• Mitigate
• Transfer
• Accept

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. 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. Any Questions?

20. Thank you