Professional responsibility

A cautionary tale into conducting business properly

Published:  02 February, 2015

By Mike Owen

With the festive period heading into the past and just the prospect of the credit card bill to look forward to, you don't need to burden yourself with the peripheral activities; with the new year comes the prospect of having to start from zero and deliver another year's business - just keep your head down and focus on capturing some business and deliver results.

As always, successful business is best performed whilst staying within the confines of what is right and proper. During the Xmas period this year, I was invited - and dragged along by my wife - to a local event, the usual type with all the guys in one group around the bar, and there was the perennial expert from the motor industry, who'd had one too many, talking about inappropriate activities undertaken in fixing his customers' cars - anecdotal evidence that the lunatic fringe is alive and well within our industry. The motor industry is not easy, especially with a liberal dose of cynicism in our customers, often caused by listening to our friend above, and the belief amongst the general public that Jeremy Clarkson is representative of our industry.

Understanding what a product is, is the basis for one of the most common misunderstandings under which we, as a sector, labour. Most will consider that a product has to be tangible, a solid activity or item which can be quantified - wrong! Advice is a product, even when not charged for. As a professional person your advice may cause the recipient to believe or act in a certain way, you would be responsible in law for this.

The premise of UK law is that you are innocent until proven guilty, except in this case. Under the law that covers this, you are guilty until you prove yourself innocent because you are the professional. Due to this little nuance, solicitors look to prosecute under 'American rules' - 'No-win, No-Fee'. Just to make you feel better, there is no hiding place. This law leap-frogs the boundaries of corporate limitations and can be brought against employers and employees alike. The limit of liability is 10 years so just cast your mind back over the last ten years...

I'm glad that this law didn't exist when I was motor racing; questions about how you were taking a corner would often provoke answers such as, "flat in third," when, "trailing throttle in second," would have been far more appropriate and caused many an excursion into the kitty-litter!

Protect yourself A claim follows the money-trail and a court action can only be taken against the person to whom you have paid money (civil action); you cannot jump to the person at the top of the heap. Your action is against the person who you paid, they can join their supplier as a third party and so on with the action ultimately reaching the originator; depending on the application of common sense, and the links in the chain may be released from liability depending on their ability to absolve themselves (evidentially) from wrong. This should form one of your strongest buying criteria's when choosing a supplier - their ability to stand on when the going gets legal.

Here again the subject of fitting 'used parts', even if supplied by the customer, raises its head. It comes back to the 'professional' status that you hold; you are expected to know and to have served the interest of your customer - not financially, saving them money is not an acceptable plea. Your customer, who supplied the part, is not professional and unable to make, or take, a considered judgement and therefore dependent on you and your council. Almost without doubt, the vendor has disappeared; their claim will be made against you (the money trail). Should the customer have suffered loss, financial or physical then you are bang-to-rights!

These basic factors of 'proper' business are the foundations of operation. Within the franchised sector the Vehicle Manufacturers insist upon their representative dealers operating in accordance with the law and are regularly trained and vetted - I applaud this. Within the independent sector this is not quite so common, with almost a disregard for these requirements and comments such as "OK, but in the real world..."

Okay, so let's look at this hypothetical case, you've lost in court and the claim is made against you and the bailiffs are now calling - they cannot seize the tools of your trade and the company is limited liability, the premises are rented and even the photocopier is on lease so other than the kettle, they will have to leave empty handed. Not so! As stated above, these cases can move outside of limited liability to assets held by you personally - all you own, including your home and that tool box!

There is only one way to operate in business and that is to do it right. Personally, I believe legal compliance should be the entry level to any scheme or association, not the volume of product purchased, nor the ability to pay a subscription. The benefit of membership should not be the ability to protect the guilty when they have been found to be in breach, or act as an insurance for the customer afterwards - the benefit of using an associated business should be legitimate, quality and safe business, not a safety net.

All of the above comes at a cost which has to be met from profits and most will know that as the costs of operation also increase as we see more sophisticated vehicle technology coming into our garages - of course, so will the upstream costs of operation in equipment and training. All of this will result in customers having to pay more and this will open the door for customers resorting to the law. 'Where there's blame, there's a claim' is coming very quickly to a garage near you and the best method of not finding yourself in 'the dock' is to start by getting it right now, following the letter of the law.

0845 355 0600

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