To err is human

The power failure and the resulting Underground stoppage in London several months ago illustrates many of the shortcomings in attitudes towards risk management and business continuation systems.

Solicitors could benefit from considering the event and its application to their own practices.

The initial failure was in the incorrect installation of a fuse - a human error.

The supervisor who checked the work overlooked the mistake - a second human error.

The resulting power cut was a combination of further factors but was not in fact severe; it was thought to be so because of its effect on the Tube system, which was out of action for a number of hours.

The Tube train managers had decided, some time before, to discontinue the maintenance of an independent electricity substation, which could supply the system if there was a power cut.

The electricity supplier maintains that the combination of events was a one-in-a-million chance and that, having rigorously checked the system, there are no further problems with the fuses.

However, this fundamentally misses the point about risk management.

Human error is a fact of life in any system.

There will always be human errors but they will crop up in different places - fuses one day, wiring the next.

While risk management systems should be directed in part to eliminating mistakes, equal attention must be given to minimising the impact of errors when they occur.

The degree to which a mistake has a detrimental effect on your business will depend on how you manage the events that follow.

The lesson to be learned from the power cut is not to scrimp on the costs involved in putting in place good supervisory systems, complaints handling procedures and business continuation plans.

These will all have a positive effect on the business and will be essential in preventing a minor mistake turning into a major problem.

It is important to remember the following:

- Good supervision not only prevents mistakes happening in the first place but enables staff to discuss problems before they reach a crisis, enabling the supervisor to remedy the mistake and rescue the situation with the client.

- An effective complaints handling procedure - which staff understand and put into practice - will limit the damage to the firm of a complaint or claim even where the complaint or claim is justified.

It gives the firm a second chance to prove itself to the client and to demonstrate that the error was truly a one-in-a-million chance and does not reflect the standards of the firm.

- Not all problems are of our own creating and forecasting the damaging possibilities of external events is an essential part of risk management.

Clients are entitled to know that their affairs will be taken care of, even if the physical environment of an office is damaged or staff are absent.

This column was prepared by AFP Consulting, a division of Alexander Forbes Risk Services UK