Managing the Risk of Professional Liability

This paper sets out a number of means by which professionals can reduce or eliminate the risk of professional liability whether as directors, employees, partners, independent consultants or contractors. A relationship between client and professional is commonly cited as an example of a fiduciary relationship: the professional "undertakes or agrees to act for or on behalf of or in the interests of' the client "in the exercise of a power or discretion which will affect the interests of that other person in a legal or practical sense."2 As a fiduciary, a professional must ensure that his or her exercise of power does not result in a position of ascendancy or undue influence over the client. Also, a professional must avoid situations where there is scope for even the perception of potential conflict between his or her professional duty to the client and his or her own Interest.