One of the important findings during the Sherpa Insurance focus interviews1 with independent Project People on the question of being sued by their client was: “it could never happen to me”.
In fact all respondees believed there was little to no risk of being sued by their client. Here are some survey quotes:
- “The only reason I have Professional Indemnity cover is because my client requires it”
- “I never sign anything off”
- “I’m too experienced and competent (to make mistakes)”
- “No-one is interested in an independent Project Manager like me”
- “They only go after the big end of town – PwC, Accenture or the large strategy consulting firms like BCG or McKinsey”.
- “I have never heard of a case of people in projects being sued”
The fact is that it’s difficult to find any recent Professional Indemnity cases in Law Reports involving independent Project People.
So are the respondees right?
Is there no risk of claim against independent Project People?
So we’re all safe then?
Not so fast. According to the CEO of an established Project Person consulting firm with 15 years in the Australian market, although rare, they do happen and most claim cases do not reach court and are settled beforehand. Many of these claims can be vexatious, meaning the client makes a claim without sufficient grounds and is really just trying their luck.
However whether a claim is real or vexatious, it needs to be defended. Legal fees quickly add up. Fees of $700+ per hour are common for a Partner in a medium sized legal firm. Not to mention the wasted time (and stress!) working on your defence rather than delivering great outcomes to your clients. All in all, defending a claim is not a nice experience.
While it appears that most claims involving Project People will not reach the courtroom, there is a chance of having to defend a claim before it gets there. Changing the term “it could never happen to me” to “it could happen to me”.
1 Twenty five, one-on-one focus interviews conducted by Sherpa Insurance between Q4 2014 and Q1 2015 with independent Project People (including management consultants) working in the Australian market.