Business Insurance > CONSULTANTS (Except Environmental or Financial)

CONSULTANTS (Except Environmental or Financial)

An executive from San Francisco was hired by a manufacturing company to take a department head position in Pennsylvania. Less than a year later, the manufacturer hired a consultant to conduct an efficiency audit at the plant. The recommendations of the audit included elimination of certain departments, including that overseen by the new executive, and his position was terminated. The former executive sued the consultant for negligent interference with his employment contract and sought damages for lost income, moving expenses, and other damages in unspecified amounts. The case was favorably resolved, but legal costs totaled almost $25,000.
The owner of a newspaper chain in the South retained a consultant to broker the sale of the newspaper chain. The consultant contacted a buyer later that year and made certain representations to the buyer regarding the level of advertiser revenue available in the circulation area, which ultimately led the buyer to purchase the newspaper chain. After the purchase, the buyer discovered that the market was less lucrative than allegedly described by the consultant. The buyer filed suit against the consultant alleging negligent breach of fiduciary relationship and negligent misrepresentation and requesting $500,000 in compensatory damages. The case was settled by payment of over $100,000 to the claimant.
A manufacturing company retained a consulting firm to do an efficiency study at its facilities. The manufacturer implemented some (but not all) of the changes, but then refused to pay the consulting fees. The consultant demanded payment of these fees, and the manufacturer responded with a letter demanding cancellation of the debt and repayment of fees paid due to unsatisfactory results from implementing the changes recommended by the consultant. The manufacturer then filed suit against the consultant in court claiming damages based on contract fees paid and lost business due to allegedly unsatisfactory advice. The court ultimately entered judgment against the consultant for almost $900,000.
A chemical plant in the Northwest was forced to shut down for three days due to a burst pipe that filled the plant with non-polluting steam. No persons were injured and no property was damaged, but the chemical company lost three days worth of production. A consulting company had been previously retained by the plant owners to ensure that the owners, in formulating a plan for streamlining the plant's operations, followed decision-making procedures consistent with certain internal and external procedural regulations. The consultant was not, however, involved in monitoring the correctness of the decisions made by the utility (i.e., whether the utility's decisions could lead to accident, etc.). The consultant was joined in a lawsuit filed by the chemical company. The suit alleged that the consultant acted negligently in failing to discover and prioritize the need for repairs in the area where the leak occurred and failing to recommend proper safety procedures. The plaintiff requested actual and punitive damages in unspecified amounts. The consultant's errors and omissions policy contained a contingent bodily injury/property damage endorsement. The claim was favorably resolved, but defense costs were incurred.
A design consultant designed a kitchen for a hospital in the Midwest. The consultant's errors and omissions policy contained a contingent bodily injury/property damage endorsement. A hospital employee was struck in the knee by the door of a piece of kitchen equipment allegedly resulting in serious damage to his knee. The employee filed suit against the manufacturer of the equipment and the design consultant (among others) alleging that the consultant negligently failed to provide a reasonably safe layout of the kitchen and seeking unspecified damages for medical expense and lost earning capacity. The case was dismissed when it was discovered that the damage to the employee's knee was caused by a sports injury earlier on the day of the alleged accident. Prior to the dismissal, however, nearly $30,000 was incurred in attorney fees.
A lawyer retained a litigation support services consulting firm to assist him in finding an expert on off-road motorcycles. He needed the expert because he was representing an individual injured in an off-road motorcycling accident. The consultant assisted the lawyer in finding an expert, who then issued an opinion that the motorcycle's brakes were defective. Relying on the expert's opinion, the lawyer continued preparing the personal injury case for trial. However, the expert later realized that he had examined the wrong set of brakes and changed his opinion, thus ruining the personal injury case and causing the attorney to incur unnecessary time and expense in the case. The lawyer filed suit against the consultant alleging that the consultant negligently misrepresented the expert's credentials. The case was settled by payment of over $20,000 to the lawyer.
A design consultant was retained to redesign the entryway of an office building in the West. The consultant's errors and omissions policy contained a contingent bodily injury/property damage endorsement. A person was subsequently injured when he tripped over one of the wide, low stairs that had been added to the entryway. The person filed suit against the consultant (and others) alleging negligent planning, design and consulting. He sought unspecified damages for his physical injuries, medical bills, and loss of earning capacity. The claim was settled by payment of nearly $6,000 to the plaintiff.

Source, Media Professionals