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Computer Consultant Held Liable For Negligence

July 1989

A federal appeals court has upheld a jury verdict for $82,500 against the “Big-Eight” accounting firm of Ernst & Whinney, in a case arising out of Ernst’s recommendation to one of its clients that the client purchase a particular computer system.

Diversified Graphics, Ltd. hired Ernst to help it select a turnkey computer system for Diversified’s business. Diversified told Ernst that Diversified did not wish to have to hire programmers or subject its employees to extensive training in order to be able to use the system. Ernst evaluated Diversified’s needs, prepared a request for proposal, and eventually made a recommendation as to which system Diversified should purchase. The computer system turned out to be unsatisfactory, and Diversified sued Ernst, claiming that Ernst’s recommendation of the system had been negligent.

The Court of Appeals held that the trial court had correctly instructed the jury that it could choose to evaluate Ernst’s conduct under a “professional,” as opposed to an “ordinary,” standard of care. In other words, the jury was free to consider whether Ernst had acted reasonably in light of its superior knowledge and expertise in the area of computer systems, rather than evaluating Ernst’s conduct under the artificial assumption that it was not a computer professional. Presumably, the jury did just that, and found Ernst liable.

TLB Comment : The Ernst case puts computer consultants on notice that they may be held to a professional standard of care, as has long been the case for doctors, lawyers, engineers and other “recognized” professionals. The case should serve as a caution to consultants in all areas of practice that their clients may attempt to hold them to a professional standard of case.

With respect to computer consultants in particular, the Ernst case places a heavy burden on consultants to research and carefully document each stage of a client’s selection and implementation of a computer system. Depending on the nature of the client’s business, the consultant must take great care to detail the client’s needs, develop specifications for the computer system and carefully scrutinize potential vendors to discover any possible inadequacies in their systems. The consultant must also take into consideration the proper implementation of the system so as to minimize the transition problems and the training and documentation necessary to permit the employees of the client to operate the system. If any one of these phases goes wrong, the consultant may find that the client will try to make the consultant the ultimate loser.