Indemnity

[Vaquero]

I signed a new contract in March 2009. In a clause in the contract I agreed to indemnify my now ex employer for errors made during the course of my work. However, a claim came to light after I left and he sought to enforce the contract even though the work which brought about the claim occurred in 2008. It went to small claims and the judge dismissed the claim because the dates didn't line up and it (the contract) didn't mention work done before the new contract date. He's now appealing to a higher court saying the first judge got it all wrong. Anyone come across this before? Does he have a chance at appeal?

[des8]

Re: Indemnity

Hi and welcome.
I think our employment people will want to see the wording of this indemnity clause, so it might be useful if you could post it up.
For what it's worth, if there was no indemnity clause in your previous contract, and as the new contract did not have a retro active clause, I don't see how he could win.

[Vaquero]

Re: Indemnity

the relevant clause says: -
"the consultant will fully indemnify the company for any compensation paid to clients as a result of complaint about the advice given by the consultant. This clause shall be valid even after the termination of the employment with the company"

[Amethyst]

Re: Indemnity

So the argument really is''is the term retrospective with regards the cause of the complaint'' (the original advice).

As you are agreeing to indemnify risk of your advice then after agreeing that clause you may be more careful about your advice as you are aware any comeback would be directly on your pocket. I'd say before you signed that clause you gave advice on a standard basis without being aware you were doing so under any risk on yourself.

Was there ANYTHING vaguely similar in your pre March 2009 contract ?

[Vaquero]

Re: Indemnity

So the argument really is''is the term retrospective with regards the cause of the complaint'' (the original advice).

As you are agreeing to indemnify risk of your advice then after agreeing that clause you may be more careful about your advice as you are aware any comeback would be directly on your pocket. I'd say before you signed that clause you gave advice on a standard basis without being aware you were doing so under any risk on yourself.

Was there ANYTHING vaguely similar in your pre March 2009 contract ?

Thanks for that point. The previous contract made no mention of any indemnity obligations etc.

[des8]

Re: Indemnity

As the "error" occurred during a period of employment not covered by the indemnity clause IMO the employer has a mountain to climb.

You mention that your work was consultancy of some kind.
I wonder about the ethics of a company in any consultancy business that does not carry Professional Indemnity Insurance but passes the risk back to their employees.
When you were given the new contract was there any mention of PI insurance?

[Vaquero]

Re: Indemnity

As the "error" occurred during a period of employment not covered by the indemnity clause IMO the employer has a mountain to climb.

You mention that your work was consultancy of some kind.
I wonder about the ethics of a company in any consultancy business that does not carry Professional Indemnity Insurance but passes the risk back to their employees.
When you were given the new contract was there any mention of PI insurance?

There was PI insurance, the claim relates to the policy excess. Of course I was unaware of the PI policy terms and conditions. The judge at the original trial said that the claim was misconceived since the contract upon which he is relying did not subsist at the time the advice was rendered. I thought that was game over?

[des8]

Re: Indemnity

Some people don't know when they are beaten
Has an appeal notice been served on you yet?

[Vaquero]

Re: Indemnity

Some people don't know when they are beaten
Has an appeal notice been served on you yet?

Yes but the circuit judge hasn't granted leave to appeal. He wants an oral application but I have to attend in case he grants permission and the appeal will follow straight away. Apparently I don't have to do anything by way of preparation but he may ask me some questions and I'd like to be ready and not fall into any traps for the unwary. His solicitor is reinterpreting the meaning of the clause in question :tinysmile_cry_t:.

[des8]

Re: Indemnity

"reinterpreting the meaning"
This sounds like Humpty Dumpty in Through the Looking Glass "When I use a word it means just what I chose it to mean - neither more nor less"

And it doesn't matter what it means, how can it be retrospective?
I doubt the judge will be after tripping you up.
If he has questions to ask you it will only be to clarify your understanding. It will not be a hostile cross examination

[Vaquero]

Re: Indemnity

As an update, the appeal was heard on Friday. The judge allowed the appeal because the first judge effectively gave me the unassailable defence (he should have offered the claimant the opportunity to bring in the previous agreement).
He ordered a retrial provided the previous contract contains an indemnity clause which it doesn't

[teaboy2]

Re: Indemnity

Best get your claim for legal expenses prepared and ready for submission then!

And maybe prepare a defense on the basis that your ex-employers claim is vexatious and ground less and therefore has no chance of any success, due to their being no indemnity clause in the earlier previous contract!

[Vaquero]

Re: Indemnity

It's certainly vexatious after most of the clients migrated with me.

[des8]

Re: Indemnity

...................and make sure you have a copy of the original contract handy, just in case their copy has miraculously grown extra clause.

[teaboy2]

Re: Indemnity

...................and make sure you have a copy of the original contract handy, just in case their copy has miraculously grown extra clause.

Yep... Wouldn't be first time we seen or heard of that happening lol!