Professional Negligence

What is Professional Negligence?

Business owners and professional individuals must adhere to certain standards of practice and owe a duty of care to their clients.

In the UK, under the Supply of Goods Act 1982 it is implied into the contract that the professional owes a duty of care to their client, and if they offer services, to perform at a standard that provides the service/product with reasonable care and attention.

Professional negligence claims are made on the basis that the standard of care was not met. Under the Act there is no definition of ‘professional’ so if that is in question, it is left to the parties to make their case and the court will decide.

Causes of Action/Types of Professional Negligence:

  • Medical – doctors, dentists, plastic surgeons, hospitals
  • Trades, services and professionals – tradespeople, surveyors, architects, engineers, lawyers (solicitors and barristers), accountants, financial advisers

Making a Claim for Professional Negligence

If the advice you were given by a professional causes you loss, you may have a claim. To be successful, you must prove that there has been a loss and that the professional breached their duty of care to you when carrying out your instructions.

The essential elements to prove are:

  • That the professional owed you a duty of care. This duty might arise from a contractual relationship between you and the professional, or because there was a particular relationship that gave rise to the need for the professional to be careful.
  • That the duty was breached by poor advice or work on the part of the professional. The test is “did that professional do what a reasonably competent persons in their position would have done?”
  • Did the breach cause loss?

If those elements are present – then a claim may be made.

The Claim Process

A claim for professional negligence may either be made for breach of contract or tort, depending on the nature of the breach.

The terms of the contract both express and implied, must be checked to see whether the contract was breached and what loss was incurred. In tort, the duty of care under the contract is breached if the professional’s actions or lack thereof have been negligent, causing loss to the client. The standard is held to that of the reasonable man.

Under the Limitation Act 1980 the time limit for making a claim for professional negligence is six years from the date on which the cause of the action accrued. Generally, in contract, this will be as soon as the contract was breached. However, in tort, it will be when the loss occurs arising from the breach of the duty of care which could be longer than six years.

Pre-Action Protocol

Professional negligence actions are commenced under a Pre-Action Protocol. The Pre-Action Protocol for Professional Negligence Claims must be used in all professional negligence cases (claims against solicitors, accountants, financial advisors, surveyors and banks, etc.) other than those against construction professionals such as architects and quantity surveyors, and medical professionals where other specific protocols are used.

The protocol encourages an early exchange of information, the narrowing of issues, and consideration of alternative methods of dispute resolution (ADR). The aim of the protocol and what is known as the overriding objective of the court rules is that the initiation of court proceedings should be seen as a last resort in resolving disputes. The protocol sets out standards which need to be followed before court proceedings are started.

Alternative Dispute Resolution (ADR)

Before a case for professional negligence goes to Court the parties should have considered and tried some type of ADR. There are several types of ADR available depending on the nature of the case. These include mediation, adjudication, arbitration, negotiations, evaluations etc. ADR generally costs less than going to Court and, if successful, will avoid the need for going to Court altogether. If not, ADR may still provide clarity on the relevant issues going forward into the Court process.

Expert Witnesses

Experts in the field will need to provide evidence as part of the claim and each party should obtain such evidence as soon as possible as it will help them decide how to proceed.

Causation

The Court will look at the implied and express terms of the contract and the actions of the parties. It will need to be established that the actions of the professional caused the loss, and that if they had acted accordingly, the loss would not have occurred. The claimant must show that this is the case, on a balance of probabilities. The Court will assess that if it is more than 51% likely that this was indeed the case, it will find in favour of the claimant. Any compensation awarded by the Court will be quantified from the date of the breach.

If the loss would have occurred in any case, the Court cannot find for the claimant. The loss must have occurred ‘but for’, i.e., because of the actions of the defendant.

Causation is a difficult legal issue and is often the most difficult hurdle to overcome in Professional Negligence Claims.

The claimant may also claim that they suffered loss as a result of the professional not advising them of something/not doing something which then led them to miss out on their required result, i.e., buying a property, selling a business etc.

Evidence

A solicitor instructed to bring a professional negligence claim will need to assess what happened, often instruct an expert and establish where the fault lies. They will need to correspond with the potential defendant to see if they wish to settle the matter before a claim is made. They will need to check the terms of the contract and the service/product being provided and all dealings and communications between the parties, both written and verbal. Did they meet the terms of the contract to the required standard: implied/express terms? Is there a duty of care? What loss occurred? Can they prove their case on a balance of probabilities?

Costs

Costs of making a claim will need to be considered at the outset. This includes the solicitor’s costs for advice and bringing the claim, expert’s fees, court fees and potential costs awarded to the other party if the claim is unsuccessful (although opponent costs can be covered by an insurance policy known as After The Event – ATE). Those costs should be weighed against the loss incurred.

Professional Indemnity Insurance

Professional Indemnity Insurance (also known as Professional Liability Insurance) covers business owners and professionals against claims made by customers/clients for sub-standard advice, work, services, including the actions of individual directors and employees. It should cover for costs of legal representation, fees and any compensation payable to a successful claimant.

If we determine that your claim is eligible, in most cases we will offer a Conditional Fee Agreement, also known as a “No Win No Fee” agreement. There are several advantages to this arrangement – it shows we are confident that your case has a strong chance of success, and protects you financially, as if there is no win, there is no payment made. In addition, it provides a clear framework for payment that all sides understand, rather than there being hidden charges down the track.

If you need any assistance contact one of our lawyers at [email protected] or call 44-151-328-1968 for a no-obligation discussion and for expert legal advice.