Dear Professional Futurists and Strategy Advisors - have you considered your Professional Liability?
Updated: Aug 2
Small, non-legal type: Not to be cheeky, but this is the sort of discussion that should start off with a disclaimer: This article is a thought piece intended to provoke a conversation and stimulate consultants to examine their professional risk in projects. It has been compiled through conversations with risk professionals and practising consultants, but by no means constitutes legal advice.
According to the Cambridge Dictionary, the simple definition of professional liability is “the legal responsibility of a professional person such as a doctor, lawyer, etc., to pay for any damage, harm, or loss that they cause as they do their job.”
When assessing whether a client has a potential claim against his consultant, there are four questions that need answering:
Were there damages or losses due to the work completed by the professional consultant?
(If ‘yes’ to question 1) Is the professional consultant liable for damages (i.e., what are the contractual terms and disclaimers, if any)?
Was the damage caused by non-performance or negligence by the professional?
Is the loss or damage intangible or can be quantified into a monetary value?
Now these steps are easier to determine in some professions than others. For example, in consulting engineering, the industry in which I am currently employed, a failure in a building design can very easily be quantified by the repair work required for physical damage and losses due to downtime. Given the number of regulations, standards, design guidelines and best practices available, it is often clinically simple to differentiate between a design or construction failure, and if it is a design failure, whether it was due to non-performance or negligence. It is therefore understandable why professional liability, indemnity and insurances are familiar contractual concerns in this industry.
But, can professional liability be applied to professional futurists?
Many futurists work as strategy advisory consultants, applying strategic foresight methodologies for both private and public sector clients. In this role, they perform two predominant functions. The first is to perform market research and trends analysis, and the second is to apply this information for scenario planning, forecasting, and strategy development. The general consensus is that this type of work is far too high level to warrant concern – and that it would be very challenging to link damages and losses (much less quantify them) to work done at a strategic level.
But, as the uses for strategic foresight expand, the closer it gets to being linked to the influence on tangible outcomes – where the risk of damages also becomes tangible, linkable, and quantifiable.
Historically, one of the largest, engineering professional liability claims globally was for advisory services. It was about a traffic forecast being grossly overestimated. The forecast had been used by a toll concessionaire, who used the forecast to calculate their potential revenue model. The overestimate, due to errors in methods and unreasonable assumptions, led to significant financial losses for the concessionaire, and resulted in a claim being directed towards the consultant who was responsible for the forecast.
For any futurist consultant, the first step at the inception of a project is to understand your client’s requirements. Once this is clear, it becomes a priority to create a clear Scope of Work document, which is to be signed off between both the consultant and the client. In this document, the method, assumptions, and level of detail for both input and output information must be communicated and agreed upon. If you feel that the client’s brief cannot be met in a specific way, this should be clarified at this stage, or as soon as this comes to light. Where you believe that any output requested may be negligent to deliver on, or the results unusable, this should also be clarified.
Once the scope is understood and agreed upon, one option that professional futurists may want to consider in protecting themselves from potential claims could be to have a disclaimer. The contents of this disclaimer may vary based on the scope of work required, however, the intention behind it is to reiterate what decisions and actions the client can make using your findings, and to what extent you are liable or not liable for the outcome of it.
Throughout the project, communication is vital – working with the client closely through the process allows them to understand the context in which your findings are made. Including the client and representatives of the interest groups that they serve in brainstorming also can help in developing potential futures. Client participation also provides reasoning and legitimacy to certain assumptions, in case they are questioned at a later stage.
The suggestions above are proactive in nature. Another perspective to consider in mitigating risk is to examine what non-performance or negligence looks like in the futurist profession.
The most obvious way is if the work is not completed as to what was agreed upon. A clear Scope of Work document, signed off by both parties, would mitigate this risk in case of miscommunication. Open and easy communication channels would also allow your client to inform you if their expectations and your performance are not in alignment. Negligence can also be displayed if the client is not fully made aware of the level of detail and assumptions that were used in the process, as well as what they can (and can’t) use the output deliverables for.
A more nefarious example is where a futurist consultant could deliberately leave out or misinterpret data or signals, in order to influence a desired outcome. Because we are all biased, stating one’s biases upfront, at the beginning of a project, may be necessary, unless it is fairly clear from one’s marketing materials (website, brochure, etc.) that you, as a professional futurist, advocate for certain futures.
As the foresight profession continues to mature, I think it is important to consider professional liability as a factor in how we engage with our clients. As a professionally registered engineer, it is always in the back of my mind.
As a community, we want futures thinking to be used at all levels of design – not just at high-level strategy sessions. We know that the lateral thinking that it inspires, can benefit more traditional design practices into creating solutions that are inclusive, sustainable and adaptive. But the more tangible the solutions, the greater the professional risks. By naming potential risks – and becoming aware of them as a profession – we can find solutions to mitigate them, which I believe will empower our community to continuously strive in better defining our profession.
Thank you to the following individuals who shared their insight with me for this article: Jacques Kotze, Chief Risk Officer of Zutari; Richard Hames, Founder of the Asian Foresight Institute, Hames Group, and HamesMcGregor + Partners; Patricia Lustig, CEO of LASA Insight; Seth Harrell, Foresight Researcher at Wavepoint Growth Strategies; and Steven Lichty, Managing Partner of REAL Consulting Group.
Samista Jugwanth is a professionally registered Engineer and Technical Director at Zutari, one of largest African based engineering and advisory consultancies. She is also an External Examiner and Industry Advisory Board Member for the Civil Engineering school at the University of Kwa-Zulu Natal. Having been trained in both design-led thinking and strategic foresight methodologies, Samista has been actively merging these toolsets into traditional engineering design to ensure that solutions offered are human-centred and inclusive of environmental, social, and economic aspects.