The importance of record-keeping in a digital world

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 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:

Photo: ©gettyimages /SDI Productions

• After a phone call, send an email to your client to clarify what was discussed, and what you will do next; • When sending emails, attach delivery and read receipts; • 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; and

The courts have an expectation, which is not unreasonable, that professionals will keep adequate records to document their interactions with clients and third parties

• Make it everyone’s shared responsibility, not just the administration staff.

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

Sally* was an occupational therapist who received an allegation from a client for whom she had recommended a wheelchair. The client had suffered an injury when their foot became stuck in the wheelchair, and alleged Sally had been negligent in her recommendation. 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.

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

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 PI insurance policy, the process can be stressful and confusing, not to mention the potential impact on your business and reputation. 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.

About the author Aon is a leader in risk and insurance broking and arranges a range of insurance solutions for occupational therapists. As the preferred insurance broker to OTA, Aon is proud to provide cover for OTA members, and our number of clients continues to grow. If you’d like to find out more about Aon or get a quote, visit aon.com.au/ota, call 1800 805 191, or email au.ota@aon.com.

* 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. Aon has taken care in the production of this article, and the information contained in it has been obtained from sources that Aon believes to be reliable. Aon makes no representation as to the accuracy of the information received from third parties and is unable to accept liability for any loss incurred by anyone who relies on it. The recipient of this document is responsible for their use of it. © 2021 Aon Risk Services Australia Limited ABN 17 000 434 720 AFSL no. 241141 (Aon) The information contained in this article is general in nature and should not be relied upon as advice (personal or otherwise) because your personal needs, objectives and financial situation have not been considered. Before deciding whether a particular product is right for you, please consider your personal circumstances, as well as any applicable Product Disclosure Statement, Target Market Determination and full policy terms and conditions, available from Aon on request. All representations on this website in relation to the insurance products we arrange are subject to the full terms and conditions of the relevant policy.