David Hurst

We have the Americans to thank for a lot of things. Not all of them are bad. In fact, some are astonishingly good - I give you Harley Davidson. One thing that’s particularly unpalatable to me is the notion that all business disagreements are a matter for courts. This mentality has been made ever more pervasive with tales of huge compensation payouts from large corporates to freeloading individuals. Is it really reasonable to eat nothing but Big Macs and then sue McDonalds for making you fat…?

Hardly. I love Big Macs and there’s nothing wrong with eating them, but I’m not so stupid as to think that eating them exclusively would constitute a sensible and healthy diet. It’s like believing that eating nothing but lard butties (that’s sandwiches with pig fat spread on them for those living outside of northern England) won’t do you any harm. Ridiculous.

How about suing a cigarette manufacturer for giving you lung cancer? So what if their warnings only covered 25% of the packet and you found that too subtle? It’s just total nonsense.

Then we have all the personal injury claims that are responsible for pushing up the prices of insurance. There are many valid PI claims, and the injured party thoroughly deserves their compensation, but there are also many non-genuine or borderline claims made by people who want to get something for nothing.

All of these things are an irritation, but not the primary focus of the point I wish to make. They are a huge contributory factor though in the changes to the way people do business with each other. In the old days, if we had a disagreement, we’d talk about it like adults and come to a satisfactory and mutually agreeable conclusion. Now, I find myself having to protect my business transactions with increasingly complex legal contracts, and I hate that I have to go through all this legal wrangling before we ever sign a deal. It wastes time and pushes prices up, but unfortunately, it is essential.

The problem with the industry I work in (IT, web development etc.), is that customers are beginning to get more tech savvy, and their requests and expectations have increased too. Have you ever heard the phrase: “a little knowledge is dangerous”? Well, that really does apply to the IT industry, which is absolutely full of people who claim to know all, but in actual fact know very little. This type of customer often feels he knows best, asks for advice and then systematically ignores it. Later, he will of course blame the failure on you. Here’s an example from my dim and distant past:

A customer wanted to buy a cheap computer, and found that he could buy very cheaply if he bought a machine with Linux pre-installed instead of Windows. He reasoned that he had a Windows disc and a licence, so why should he pay for it again? Valid point. He asked my advice, and I told him not to buy the Linux machine because in all probability he would not be able to remove the Linux hard disk partitions with his Windows install disc.

Now, a professional like myself knows that you need to use a program called FDisk to do this, and this involves creating or using a boot disk with the FDisk tool on it and using it to manually delete the non-DOS partitions. What many do not know is that you also have to delete the Master Boot Record (fdisk /mbr is the command you’ll need folks) before Windows will recognise the hard disk. This is a relatively simple task, but you should possess the knowledge of how Linux and Windows partition tables differ to understand why you need to do this. “A little knowledge…”

The other issue this customer would have is that no Windows drivers were provided with the machine, so he would need to both identify the components and then find appropriate drivers. This included a software modem, and anyone who’s tried finding drivers for those things will know the pain involved. So, my perfectly legitimate and sensible advice, based on my considerable experience, was that he would not be able to reinstall the machine with his “a little knowledge”. I did say that I could do the reinstall for him, but he would need to cover me for 3 hours’ labour costs, at which point the total price became higher than just buying the machine with the Windows option.

He of course, ignored my advice, bought the Linux box, wasted a whole day of his valuable time, and then paid me to reinstall it for him. He stopped just short of blaming me for the incident, but it was clear he was unhappy parting with his cash.

This often happens with websites too. Customers employ us to build something for them, completely ignore our advice on pretty much every issue (I mean what do we know? We’ve only built hundreds of commercially successful websites.), interfere with project development at every opportunity, and then blame us when it doesn’t work the way they expect it to.

Again, a little knowledge is dangerous. Computers make tasks incredibly easy. Look at the iLife software included with Mac OS X for instance. Within minutes you can create a professional song, good looking personal website, photo album etc. All the work is done for you by the software. As a result people with a little knowledge then often assume that building a dynamic commercial website or developing bespoke software is just as easy. They simply don’t realise the impact that even seemingly small changes can have in terms of development time. Often, they will never accept that they should pay for this time, or realise that any delays caused by these changes are actually their fault.

This is analogous to instructing a builder to build an extension to your house to a pre-defined plan, then changing every aspect of the plan and still expecting the builder to finish on time and within budget. Frankly, it’s absurd. No-one would expect that at all. You would expect your builder to charge you for the additional time required, and you would certainly not expect him to stick to the original time frame. But you see, building houses is an old industry. Everyone knows how it works, and have some idea of the processes involved (architects plans, planning consent, groundworks, foundation, construction etc.). The same is not true of the IT world, and in particular web design. This is a new industry, and whilst people in general are starting to have a basic comprehension of how things work - “a little knowledge” - they fail to perceive the entire picture and their judgment is impaired as a result.

So, I’ve pointed out that society in general is increasingly disposed to resolving disputes through the court, and I’ve expressed my view that people still don’t understand the IT world properly. See where I’m going with this?

Yep, basically the instances of customers taking IT consultants, and web developers to court is on the rise. I was speaking to a solicitor recently who works exclusively in defending professional indemnity claims for the IT industry. That’s all he does, and the cases are very similar.

Whereas the legal world used to be the exclusive domain of wealthy corporates or educated legal professionals, the recent trends in litigation have unraveled some of the mystique surrounding legal processes, and once again we have the “a little knowledge is dangerous” factor. The UK government has further compounded this with websites like Money Claim Online, which basically takes all the legwork out of preparing a County Court claim and makes it easy. Dream up a charge. Pick a figure you’d like to claim. Pay the court fee. Bingo. Right? Wrong actually. All this does is waste a whole load of time, and will probably (unless you really know your stuff or have a water tight case) result in failure. Failure in County Court = a CCJ on your credit record. This method of litigation is really best suited to financial (late payments, non-payment etc.) disputes rather than contractural disputes - those are best dealt with at High Court and if you take that route, expect to cough up £10k before you even start!
There is this theory that firing a solicitors letter across the bows of a company you have a disagreement with will immediately prompt a flurry of activity and result in said company capitulating to your every whim. This is again nonsense. The minute solicitors get involved everything slows to a snails pace. It’s so much better to just set emotion aside and talk like adults. No-one responds well to threats. This is why the UK government is now actively promoting Alternative Dispute Resolution (ADR), and I’ve enjoyed being involved in the national mediation helplines that have been set up to help resolve disputes without the need to go to court. Indeed, rejecting mediation can have significant implications on any court proceedings, particularly with regard to claims for legal costs, such is the government focus on ADR now.
Actions like this should be an absolute final resort, not something to be jumped upon the minute an individual doesn’t get his or her own way. In the case of the County Court claim route, the immediacy of issuing the claim may seem attractive, but in truth the defendant has plenty of time in which to submit a defence and counter claim, then there are case management hearings, court recommended mediation, disclosures etc. to be taken care of - all of which will take several months. Hardly an immediate or stress free solution for either party.
So how can small businesses owners protect themselves from this sort of lunacy and retain their sanity?

1. Document everything. All emails. All letters. All meeting notes (record meetings on a dictaphone - with client permission). Make records of each and every phone call on a phone log. If anything goes wrong, you will be glad of this.
2. If you are offering a service, document your time.
3. Make sure the contract clearly outlines the end goal.
4. Pay a solicitor for a really good set of terms (we had ours drawn up by top lawyers and it’s a real protection - very difficult to contest in court, and very easy to defend) and make sure you stick to them.
5. Explain the terms in “friendly language” at the outset of the contract, and before the contract is signed. Be clear about who owns what.
6. Be prepared to be flexible, wherever possible, but never bend too far. Draw a line in the sand and stick to it.
7. Purchase PI (professional indemnity) insurance - absolutely essential. Solicitors will charge £100 - £200+ per hour!
8. Don’t respond to any solicitors letters yourself - seek legal advice. If you have PI cover, you probably won’t have to pay.
9. Incorporate your business to limit your personal liabilities. If anything untoward happens in court, you will walk away without any personal black marks.
10. Don’t fight a case unless you know you will win.

It’s all fairly obvious stuff, but you’d be surprised how many businesses have no protection. And, even if you follow the above, and even if you do an excellent job, you may just be unlucky and have a client who prefers litigation to discussion, but at least you will sleep at night.

In all my ten years in business, I’ve only once suffered court action and thanks to my rock solid legal preparations it wasn’t a problem. It saddens me greatly that the business world is heading this way and I wonder if there will come a day when we can’t do any work at all for fear of premature litigious activities.

I welcome your comments and experiences below. Please remember that the thoughts and opinions expressed here are entirely my own and do not represent the thoughts and opinions of Higher Sites Limited or any other person or company. (Damn. It pains me that I even have to put this disclaimer on the page.)