The Law Shop is now closed. Please click here to find out more.

Professional Negligence

If you have received inadequate advice or representation from a qualified, professional person and lost out financially as a result, you could make a professional negligence claim.

Professionals are legally bound to exercise “reasonable skill and care” when dealing with clients. If they fail to do this and their mistake was one that no reasonable professional working in the same field would have made, and the client lost money as a direct result of the mistake, then they  may be liable for damages.

Disputes arising from professional negligence can involve all manner of professionals, including:

  • Accountants
  • Architects
  • Barristers
  • Engineers
  • Financial advisers
  • Insurance brokers
  • Solicitors
  • Surveyors
  • Tax consultants

For a professional negligence claim to be successful, you will firstly need to establish the existence of a duty of care on the part of the professional, and that this duty has been breached.

If it is clear that the duty of care has been breached then it is also necessary to prove that your financial loss came about as a direct result of the negligent professional’s actions. It is only possible to claim for losses that are reasonably foreseeable.

When making a claim, it is advisable to use the services of specialist professional negligence solicitors. Solicitors can provide you with essential advice on:

  • existence of a duty of care
  • scope of that duty
  • quality of the advice that is given by the professional
  • issue of causation
  • duty to mitigate, and;
  • measure of compensation

Before issuing court proceedings you are normally expected to follow certain procedures when making a claim for professional negligence. By following the right procedure this will show that there has been co-operation between you and the defendant in an attempt to settle the case without going to court.

These procedures are set out in the Professional Negligence pre-action protocol which involves corresponding directly with the negligent professional in question either by yourself or via a professional negligence solicitor and setting out the factual and legal basis of your claim. The letter you send setting out your claim is known as the Letter of Claim.

According to the protocol, the Letter of Claim should include the following:

  • A chronological summary of the case
  • Allegations against the professional
  • Confirmation of whether an expert has been appointed

The professional must acknowledge receipt of the letter within 21 days of receiving it, and three months to investigate the matter.

If no settlement is reached then you may take your case to court. It is important to note that there are strict time limits in which to bring Court proceedings. As soon as you become aware of a potential claim, you should seek legal advice to ensure that your claim does not become time-barred.

Claiming for professional negligence

In the event of being a victim of poor or negligent advice received from a trained professional, a compensation claim could be sought. A trained professional could be any of the following:

  • solicitor
  • accountant
  • architect
  • surveyor
  • other specialist.

There are a variety of different claims that could be brought to court. Please see below for a few examples of instances of professional negligence:

  • misselling of endowments, pensions, bonds and other financial products
  • negligent house surveys and/or valuation reports from surveyors or valuers
  • poor legal advice delivered by solicitors or barristers, or what’s formally known as failed litigation
  • conveyancer negligence and property transaction issues
  • bad GP advice, clinical errors or mistakes signifying medical negligence
  • complaints regarding architects, often coupled with building contractors.

Information, proof and completed processes required in order to take a complaint to court, can be found in the three stages below:

Stage 1 - Establishing a duty of care

Establishing a duty of care regarding a professional's work should be relatively easy, assuming there is an official contract stating a pre-agreed standard and duty of services. It is a legal requirement that all providers of a service, performing contractually are obligated to provide the service with due skill and diligence, while in the event that time is not specified, within a reasonable time period.

Stage 2 - Establishing a breach in the duty of care

In order to be able to progress with a professional negligence claim, a claimant must be able to provide proof that the standard of the work provided by the professional is under that of which expected from a reasonable professional, employed within the field to which the poor service was provided.

Stage 3 - Proof of loss of earnings or finances

Often difficult to prove is the loss of profits within a negligent claim. The claimant must be able to provide solid proof that they are in fact worse off than they were prior to the professional's service, or worse off than they would have been if the professional had carried out the work with the expected due skill and diligence.

In some instances, primarily with negligent advisers, the negligence is not a direct cause of any actual financial loss - rather a disappointment. Unfortunately, disappointment does not constitute grounds for a professional negligence claim.

Claims can not be made against poor service or poor professional attitudes or procedures. Only specific financial loss claims are entitled to compensation through a claim, actual loss must be demonstrable either in consequence or predicted with a great likelihood.

Examples of professional negligence

Negligence law is mainly governed by case law and the subsequent decisions by the courts. The fact that negligence law is mostly case law means it can sometimes be difficult to understand and to apply to situations. This has then lead to a number of developments with regards to the law of negligence that the courts have dealt with.

Below are some example cases relating to negligence cases.

Donoghue v Stevenson (1932)

One of the most important cases regarding negligence is the case of Donoghue v Stevenson, which established a duty of care is owed to other people. Before this case there was no clear law of negligence and whether or not a duty of care was owed.

In the case of Donoghue v Stevenson it established a duty of care was owed to anyone who is reasonably foreseeable to be caused harm by their conduct. The case involved a drinks manufacturer who was sued because a decomposed snail was found in one of their drinks by a customer. This was found to be a close enough link to foresee that harm could come to customers of a manufacturer.

Hedley Byrne v Heller (1963)

The case of Hedley Byrne v Heller was the first cases that dealt with a statement, rather than actual conduct. The courts had been reluctant to hold people responsible for what they say, but when someone relies on a statement then there is some responsibility.

The case involved a company who was asked to provide credit to a client. The company then checked the client’s bank to check he was likely to pay the credit back. The bank negligently stated that the client was in a good financial position, when in fact he was not. The company then provided the credit and was subsequently not paid back. The bank was then found liable of negligent misstatement and was sued for damages by the company.

Caparo v Dickman (1990)

However, negligent misstatement is not applicable every time someone relies on a statement from another. The case of Caparo found that investors could not rely on an internal audit report because it was not for their benefit. The audit report was not meant to be relied on by investors and when the investors lost money they could not sue the auditor for damages.

For there to be negligent misstatement there must be a special relationship between the parties involved. This means one party must assume responsibility for their statement and that someone will rely on that statement.

Smith v Bush (1990)

There is also different circumstance when negligent misstatement can be applied. In the case of Smith someone relying on a survey for a mortgage evaluation on a small property can rely on that evaluation, if the property fell down after buying then the surveyor could be sued for damages. On the other hand if it was an expensive property then it would not be relied on and a full structural survey would need to be carried out.