F E AT U R E
The importance of recordkeeping in a digital world Aon
Why keeping appropriate records can help during a claim
In a world in which almost everything is paperless, keeping records and filing documentation might slip your mind as you go about your usual business. While digitalisation 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. Recordkeeping also goes beyond simply filing documentation. Think of all the ways you might interact with clients, whether by phone, text, email or in-person. Good record-keeping should encompass keeping details of all conversations and interactions, no matter how seemingly minor.
Consequences of not keeping adequate records
Poor record-keeping can lead to multiple challenges for small business professionals. Firstly, you may be held accountable for something you otherwise would not have been liable had you maintained records relating to the advice or services you provided. Lack of appropriate records can also lead to going back and forth unnecessarily. Mistakes are also possible 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 42 otaus.com.au
claims, lack of appropriate records often makes it difficult to defend claims. If you do need to make a claim under your PI policy, the outcome may not be in your favour. As Carter Newell Lawyers partner Michael Gapes says, “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. 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 record-keeping practices who may have been involved in countless similar transactions over the course of many years.” He goes on to say: “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 multimilliondollar 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.”
Following best practice
Maintaining appropriate evidence and records doesn’t have to be a tedious task. Provided you have appropriate digital infrastructure to store information securely, sometimes it’s enough to simply develop some small habits to help ensure you can keep adequate records. Following are some things you can do to get into the habit of ensuring you’re documenting all your interactions and conversations appropriately:
