In a world where almost everything is paperless, keeping records and filing documentation is something that might slip your mind as you go about your usual business. While digitisation has made record keeping easier in some ways, it has also brought about some complexities. While there was a time when everything needed to be done in writing, nowadays a simple phone call can be enough to prompt action. Record keeping also goes beyond simply filing documentation. Think of all the ways you might interact with clients, whether that’s via phone, text, emails or in person. Good record keeping should encompass keeping details of all conversations and interactions, no matter how seemingly minor.

Poor record keeping can lead to multiple challenges for small business professionals. Firstly, it can lead to you being held accountable for a matter you may not have been liable for had you maintained records relating to the advice or services you provided . Lack of appropriate records can also lead to unnecessary back and forth in going about your usual activities, which is likely to impact your service. Mistakes on your part are also a possibility as a result of failing to adequately document your client interactions. These mistakes can lead to allegations of professional negligence from clients, and end with potentially costly litigation.

And while you may hold Professional Indemnity (PI) Insurance to help cover such claims, lack of appropriate records often makes it difficult to defend claims as well. This means that if you do need to make a claim under your PI policy, the outcome may not be in your favour.

According to Michael Gapes, Partner at Carter Newell Lawyers:

“In the absence of contemporaneous written records, the Courts will often have to make findings of credibility and decide whose recollection of events it prefers” he says. “It is unfortunately often the case that the Courts will favour the evidence of the consumer or client, who may profess to have a very clear recollection of events in circumstances where he or she has not previously been involved in a similar situation before, over the evidence of the professional with poor keeping practices who may have been involved in countless similar transactions over the course of many years.”

He goes on to comment “The Courts have an expectation, which is not unreasonable, that professionals will keep adequate records to document their interactions with clients and third parties. We [Carter Newell] have successfully defended multi-million dollar claims on behalf of numerous professionals based upon file notes which they have drafted and retained on file evidencing the advice which they provided to their clients. The Courts have regarded these contemporaneous file notes as the best evidence available and certainly far more accurate than relying upon the oral recollections of parties at a trial many years after the relevant events took place.”

Maintaining appropriate evidence and records doesn’t have to be a tedious task. Provided you have appropriate digital infrastructure set up to store information securely, sometimes it’s enough to simply develop some small habits to help ensure you can keep adequate records. Here are some actions to get into the habit of to help ensure you’re documenting all your interactions and conversations appropriately:

• After a phone call, send an email to your client to clarify what was discussed, and what you will do next.
• When sending emails, place delivery and read receipts on them.]
• Save emails to shared network drives (where there aren’t privacy concerns) – this is likely to be especially helpful if staff members move on
• Ask clients to submit all requests in writing.
• Invest in a Dictaphone so you can keep records while you’re on the go.
• Make it everyone’s shared responsibility – not just the administration staff.

To demonstrate just how helpful sound record keeping can be in the event of a claim, regardless of your profession, here are a couple of claims from Aon clients where record keeping helped the outcome of the claim.

Tim* was the property manager for a house tenanted by Jenny*. Jenny suffered an injury due to a fall down the stairs in the home due to the timer light failing to switch on. Jenny took legal action against Tim, and claimed that she had informed Tim of the light not working, but Tim claimed that he had not been informed of this required repair. The court ruled in favour of Tim as he was able to produce very comprehensive records of all interactions (amongst which there were no reports or entries of Jenny advising of the faulty light).

Sally* was Occupational Therapist who received an allegation from a client she had recommended a wheelchair for. The client had suffered an injury when their foot became stuck in the wheelchair, and alleged Sally had been negligent in her recommendation of the wheelchair. However, as Sally was able to produce detailed records of each of her appointments with the client, Sally’s claim was successfully defended, and she was not required to pay compensation.

How a broker can help…

While keeping adequate records should be a priority for professionals, sometimes, it’s not enough to completely eliminate allegations of professional negligence. If you are faced with an allegation of negligence, and need to make a claim under your Professional Indemnity Insurance policy, the process can be stressful and confusing to navigate; not to mention that the potential impact on your business and reputation would only add to this stress. In such situations, arranging your insurance through a broker can be highly valuable. An insurance broker can guide you through the process and help lighten the load significantly, as well as lobby and negotiate with insurers to help ensure you’re getting the best possible outcome.

*This story is based on a real-life claim experienced by a client with insurance arranged by Aon. All names have been anonymised for privacy reasons