We live in a world of referrals, and it is all about getting the right people connected with the right people. At times, our clients need help that we cannot provide. In truth, if we are being a great service provider, we know the limits of our ability and we want to make sure those clients are taken care of.
The short answer is “Yes, we can be responsible for negligent referrals.” There are cases that hold lawyers and other professionals responsible for making referrals. Of course, there are several factors involved. One is the relationship with the client. Was the client relying on you for the referral? Did you do so with care or was it negligent?
In the process, you should document your care, to show that you were careful in making the referral. You must protect yourself. Ask if the person you are referring has appropriate insurance so that you are protected. If they have a line of defense and insurance, then odds are that the insurance will pay before you will be held personally or financially responsible for the person’s actions. Also, you may want to consider using disclaimers. If necessary, tell people when you are making the referral that you have not done a detailed investigation, and that they should do their own investigation, their own due diligence.
Know that there is some risk to doing referrals. It has not been that common that people have been held responsible for their referrals, but make sure you are protected in those cases. Be careful, exercise great discretion, and make sure you understand what you are doing.
What has been your experience with giving referrals? Have you hesitated to give referrals? Have you had people come back to you, upset about referrals that they have been given? Join us in the comments below and let us know your experience.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Freeimages.com/Photographer Jason Morrison.
About the Author
Shawn McBride — R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride or call (214) 418-0258.
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