Sued for Damages After Contractor Ineptitude

[Blunderer]

Hello everyone, I am looking for some reassurance here from anyone experienced in the industry.

We are a Permanent Recruitment Consultancy who place the odd contractor here and there.

We placed a candidate with a company for 2 months around Christmas time. Everything went fine and he has now left. We are now chasing the money they owe us (we have paid him up to date through his umbrella company) and they have just revealed the following:

Apparently the chap was terrible and made some serious errors when working there. So much so that he brought down their network and supposedly affected their business.

They are now refusing to pay the bill (£15Kish) and, forthermore, are going to sue us, the recruitment company, for damages.

I have not come up against this before. I assume that I will be covered in my public indemnity insurance for this, and the contractor will be as well.

Does anyone know how the claim process will work? Will they sue us then we sue him? Will the insurance companies sort it out between themselves? Will the umbrella companies be involved? Somebody somewhere will be contesting this claim of course, but I am not sure whether it will be me or someone else.

I have informed my insurers and have made an appointment with my legal advisers, but I just wondered if anyone had any experience of this. Is there any way my insurers may try to wriggle out of this one on a technicality or anything?

Any help or comments on similar scenarios would be appreciated. Are there any agency owners or senior managers out there, perhaps? Or mature contractors with legal experience?

thanks in advance

[Captain Jack]

Assume nothing, admit nothing, and contact your insurers. I doubt your public liability policy will cover this though. You need professional liability insurance for this kind of thing.

Of course, insist on everything in writing, i.e. a detailed statement of the nature and extent of the alleged damages. You can counter-sue the contractor naturally.

I repeat, assume nothing, admit nothing, and contact your insurers.

[Shimano105]

Serves you right for using blaggers :rollin

[Blunderer]

thanks for the reply, captain, I have Professional Indemnity insurance. That's what I meant.

[bogeyman]

The contractor should have his own professional liability insurance. It's his problem. Should be nothing to do with you as an agency.

Hey! Hands up all those solid pros here who DON'T have professional liability insurance.

[Blunderer]

The contractor should have his own professional liability insurance. It's his problem. Should be nothing to do with you as an agency.

Hey! Hands up all those solid pros here who DON'T have professional liability insurance.

This is what I am not sure on, bogeyman, because the client's contract was with us rather than him so it us they are going to sue apparently.

[TheFaQQer]

Did they sign off any timesheets? Most of my timesheets have a disclaimer on them that says something like "The above times are an accurate record of the days worked by the Consultant whose performance over these days has been satisfactory and you are hereby authorised to invoice my company at the agreed rate" - if there's nothing similar on your timesheets, get it there NOW!!!

If they sue you, then you would need to sue the contractor, or get him included as a party to the action so that you can get any money that way. Plus, you probably should be looking at chasing the debt anyway, since it's late.

Make sure that you have a copy of all correspondence between yourselves and the client. Make a note of any conversations you have had, and when they took place. Have they said anything before now to indicate that they weren't happy with the contractor? Since he finished the gig, if they didn't say anything at the time, I would assume that you are in a good position - they have left it late in the day to be saying that they aren't happy with his performance.

IANAL etc. etc.

[Captain Jack]

thanks for the reply, captain, I have Professional Indemnity insurance. That's what I meant.

Good, that's a start. Don't take ill-informed opinion and speculation from this board on such a serious matter. Speak to your insurers now. Right now. As soon as you have finished reading the next sentence.

They can refuse to play ball if you don't notify them of a likely claim as soon as you know of one.

Have you spoken to them yet? Come on, get dialling!

[Captain Jack]

The contractor should have his own professional liability insurance. It's his problem. Should be nothing to do with you as an agency.

Hey! Hands up all those solid pros here who DON'T have professional liability insurance.

Unfortunately it will though as the contract is with the agency not the contractor. The client sues the agency, the agency counter-sues the contractor.

[Captain Jack]

This is what I am not sure on, bogeyman, because the client's contract was with us rather than him so it us they are going to sue apparently.

Correct. See above.