I often speak to groups of professionals on how to avoid errors and omissions claims. When I started making such presentations more than 30 years ago, I would hold up a piece of notebook paper and explain that it was a professional’s “best friend” when it comes to avoiding future problems. A memo of a conversation with a client detailing and confirming the services that can (or can’t) be delivered and the realistic outcomes that can (or can’t) result from those services may provide the best defense when a client complains. This is only true to a point. Sometimes, written communications provide a client with ammunition for a claim of negligence.
My partner Gregg Kahn from our New Jersey office was recently interviewed for an article in Business Insurance about the increase in real estate errors and omissions claims due to the expansion of services by real estate professionals. Gregg correctly noted that real estate brokers (and all professionals) should carefully review their contracts before agreeing to perform services and should document all conversations and communications with clients.
While I agree that client communications should always be confirmed in writing, attention should also be paid to less formal communications between employees and in the day-to-day communications between a business and third parties. We tried a case for an insurance broker who received a call that an earthquake caused property damage to the wharves, piers and docks of a client. She was looking at the recently delivered policy, which excluded the wharves, piers and docks of the client, when the call came in. The court allowed her detailed notes of the conversation into evidence, including her one-word handwritten note in the margin – an expletive with a double underline.
With the boom in electronic discovery, internal communications that used to be exchanged verbally by walking next door or by picking up the phone are now memorialized forever in emails. While the content of oral conversations can be denied or questioned, if they are in writing – on paper, on a hard drive or in the online universe – they are “virtually” forever
Most of us send business emails during the work day containing personal information or ideas unrelated to the task at hand. “Have a nice day.” “Did you enjoy your vacation?” “Any plans for the weekend?” It is human nature to develop a friendship or common ground with people we deal with on a regular basis. As we become more familiar with our co-workers and others outside our office, our communications can get casual or downright sloppy: “This client is a pain in the rear.” “Went to a great party last night.” “I am behind the eight ball on some projects.” These comments, however, can live on and it is not hard to imagine how they could hurt the defense of a professional malpractice claim.