Also, as an individual, the adverse consequences of getting something wrong are likely to be much more damaging. However, sometimes professionals fail to perform their responsibilities to the standard expected of them. This can cause significant loss and damage to the client, who may be able to claim compensation in order to recover at least some of those losses back from the professional.
Claims against a professional can be based on a breach of a term in the contract made between the professional and the client (also sometimes known as ‘the retainer’ or ‘engagement letter’), as well a breach of duty of care owed by the professional to the client in the law of negligence, or both in contract and negligence at the same time.
The contract for the provision of services may be in writing but it does not have to be. If it is in writing, the contract may include terms that are not expressly stated but are implied for one reason or another. For example, a term may be implied into the contract that the service provided will be carried out with reasonable care and skill. It is possible for the retainer to exclude or limit this implied duty (and other duties that are expressly stated or implied into the contract), subject to the law and professional rules. A duty of care can arise even if there is not a contractual relationship between the parties.
A professional who gives advice which turns out to be wrong is not necessarily in breach of a duty of care. You will have to demonstrate that the professional’s act or omission fell so far below the standard to be expected of a reasonably competent professional that it was such as to be negligent. Even then, it is also necessary to establish that the professional’s breach of their duty has been the cause of the financial loss being claimed. For instance, an accountant may incorrectly complete a person’s annual tax return which, upon scrutiny by HMRC could result in additional tax being due once the correct figures are submitted. If that additional tax was always going to be payable, then it cannot be said to be a loss which would be claimable against the accountant, although any interest and penalties imposed by HMRC could constitute recoverable losses.
If you believe you have a potential claim against a professional that has been negligent then please contact our specialist lawyers on 020 7935 3522 or by clicking on the ‘How can we help?’ icon at the top of this page.
A claim for professional negligence is usually brought by the professional’s client. However, depending on the circumstances, there are limited exceptions where a third-party may also be able to bring a claim.
In theory, a claim for professional negligence can be brought against any professional adviser.
Claims for professional negligence must be brought within strict time-limits (known as ‘limitation periods’), otherwise the claim would be deemed statute-barred and lost forever.
The primary limitation period for a claim against a professional is 6 years from the date of breach. In contract, the cause of action accrues as soon as the contract is breached. However, in the law of negligence, no cause of action accrues until a loss as been suffered.
If the client does not have knowledge of all relevant facts at the time, then it may be possible to rely on a date of knowledge. In such circumstances, the limitation period may be extended to 3 years from the date that the client had such knowledge, albeit subject to a long-stop date of 15 years from the date of the negligent act in question. However, this will be determined by the Court based on when a reasonable person ought to have recognised that there was a risk that negligence had occurred, and not necessarily when they say they came to find out.
Whilst it will often be desirable for professionals to give advice in writing (for their own benefit as much as their client’s) there are many advantages in giving oral advice, not least because it creates an opportunity for discussion and clarification of any issue that the client may not have understood, and professionals frequently give advice orally. However, even if you were given advice orally, your professional adviser may still have made a note of any attendance on you during which advice was asked for or delivered. Also, other documents may exist which may record the advice you were given. If no written record exists of the advice you received, this will not prevent you from bringing a claim against a professional, however it may make it more difficult to succeed.
A professional may attempt to exclude or restrict liability by an exclusion clause contained in the retainer. However, parties do not have complete freedom to insert exclusion clauses into contracts and it may be possible to argue that such a clause is ineffective. This is even more so if the retainer has been made between the professional and an individual, as opposed to a business client. The use of exclusion and limitation clauses is also restricted in certain professions.
No, not usually. Unless the particular circumstances of a dispute make it inappropriate to do so, the parties have to comply with relevant Court prescribed guidelines for attempting to deal with professional negligence claims first. The objective of these guidelines is to assist the parties in attempting to achieve an early settlement of the claim, if possible, without the need for Court proceedings. A party may be subject to an adverse costs order in any subsequent claim that might be commenced at Court if they have not properly complied with the requirements of the guidelines, even if they are successful in the claim.
If you are successful in your claim, the Court should award you compensation, the aim of which is to put you in the position you would have been in had the professional not been negligent. How much money this will amount to will depend entirely on the particular facts of your case.
However, you have a duty to mitigate your loss which means that you are not able to recover compensation for any part of your loss that you could have avoided or minimised by taking reasonable steps. Also, if any part of your loss and damage was partly suffered as a result of your own actions, any compensation awarded by the Court may be reduced to reflect your share of responsibility.
Generally, if you are successful, you should be able to seek recovery of your legal costs of bringing the claim.
If your claim is less than £10,000 it would likely be deemed by the Court to be a small claim and in those circumstances your legal costs (save for very modest amounts) are not recoverable even if you are successful.
Most professionals are required to carry insurance to cover the risk of a negligence claim being brought. This may mean that, even if your professional adviser is insolvent, is of limited financial means, or has stopped trading, you may still be able to recover compensation and legal costs.