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Manufacturing or Drilling, Treat Customer Concerns with Care

Defending Products or Services in Court Can Be Costly

By David King
risk management in drilling

You consider your work top-notch, but whether you provide drilling services or serve the space in manufacturing, you may eventually find a client who disagrees so much about your work quality he’ll take legal action. What happens then?

Source: David King

July 26, 2023

I have written about this so many times. I deleted every one. As I went into some details, it just made me irritated. I decided to skip the details and just talk about the experience.

Never ignore or take any customer concern lightly. Every complaint can lead to a time, dollar or reputation drain with the potential to suck the life out of a company. This happened to me a few years ago and certain aspects continue to irritate me.

Always respond quickly when a customer calls with concerns about the work or products you provide. Even if it is a simple, “I got your message and will get back to you as soon as I do some research” call. Then make sure it happens within a day.

Analyze the issue. Is it a product issue? Your workmanship? Was it due to your customer’s use? A good conversation with your customer can help. Be careful not to seek information in a way that seems to point to operator error. Do not put them on the defensive. Ask for photos. Make sure that you document this conversation, perhaps in a follow-up email to your customer confirming what was said.

In my case, I got a call on a July Fourth weekend saying that the drill pipe I had provided was “coming apart.” My original thought was it broke or cracked. I requested photos, got them same day and recognized the issue immediately. I messaged back that I would visit the site within the second business day, and that I required some time to speak with the manufacturer and gather details describing the issue.

The customer notified me on a Saturday. Sunday I knew the issue. Monday I confirmed with the factory, and had their response and promise of action. I made a few calls to determine if my customer was a “straight shooter” or someone who would try to milk the situation. With everything documented and my explanation prepared, I was ready for the site visit.

I met with the customer and went to the rig. I inspected and photographed the pipes that had these issues. Everything was as I expected. I gave my explanation of what I saw and how it occurs, and offered what I considered a fair solution. My customer then demanded complete drill string replacement indicating that we were heading to a long-term, complicated ordeal. I was glad that I had done the earlier documentation and there were no doubts as to importance of continuing this process.

I then alerted my insurance company and attorney as to a potential problem.

During this time I continued responding to my customer’s calls and e-mails. Every additional concern was met with a response, in writing. He was searching for a valid reason to get all the pipes replaced. I was polite and held to my original response that I saw nothing to indicate that his demands were warranted.

My attorney thought my case was good but advised me that anything can happen in court.

Eventually the sheriff visited and served me the official paperwork that my company was being sued. I immediately sent the suit to my attorney and insurance agent. My attorney thought my case was good but advised me that anything can happen in court. My insurance agent, surprisingly, said coverage did not include this type of issue. I assumed we would be covered, but we all know what that means.

If this happens, respond to the suit item by item through your attorney, keeping in mind industry terminology may require further explanation. Be specific and thorough.

My case, unfortunately, was filed in a court too far from my attorney’s office. I had to hire a law firm serving that county — a situation you want to avoid. The cost for this kind of defense adds up. Legal fees for my case exceeded $20,000. Bowing to my customer’s demands would have cost me $80,000. Was it worth it?

Could we have prevented this? My customer was convinced that he was right. He had taken the advice of others. In a perfect world, only the truth is presented and those rendering judgement understand enough technicalities as to be fair. This is not a perfect world and our legal system can sometimes be a craps shoot. In my case, the judge’s decision included this description of drilling a well: “The drill pipe is hammered into the ground and the pipe can shatter, sending deadly shrapnel creating danger to those nearby.”

Bottom line: Take every customer concern seriously so to help avoid putting your company’s future at risk. If it comes right down to it, you may have to weigh whether the customer’s solution (regardless what you think of it) comes in as cheaper than the cost of legal defense. Choose wisely.

KEYWORDS: drill pipe

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David king

David King has decades of expertise in drill pipe manufacturing and retired as president and owner of Kingsland Drill International, a drill pipe and accessories supplier based in Mercersburg, Pa. For more information, call 717-328-9256.

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