When you instruct a solicitor, accountant, surveyor, architect or financial adviser, you place your trust in their expertise.
Most professionals deliver a high standard of service, but when things go wrong the consequences can be serious: a missed deadline, a flawed valuation or unsuitable investment advice can cause substantial financial loss.
In this article, our commercial litigation and dispute resolution team explains how professional negligence claims work in England and Wales, and what you should do if you think you have been let down.
Who is a professional?
In professional negligence claims, a professional is an individual or firm with formal qualifications, specialised training or expertise who is employed or relied upon to provide a skilled service or someone who holds themselves out as possessing a higher standard of care from that of an ordinary person.
What must be proved?
A professional negligence claim usually requires the claimant to show three things:
- that the professional owed them a duty of care;
- that the professional breached that duty by falling below the standard of a reasonably competent practitioner in the same field, and
- that the breach caused a quantifiable loss. These losses, however, must be reasonably foreseeable and not too remote.
Where services are supplied under a contract in the course of a business, section 13 of the Supply of Goods and Services Act 1982 implies a term that the service will be carried out with reasonable care and skill.
In most cases, a duty is owed both in contract and in the tort of negligence, and the Supreme Court has confirmed that the extent of the professional’s responsibility is the same under each.
Importantly, the standard is that of the ordinary competent professional, not perfection. An adverse outcome does not by itself mean that the professional was negligent, which is why independent expert evidence on the expected standard is often central to these claims.
What examples are there of breach of duty of care?
- Valuers/surveyors/architects – Failing to carry out a proper inspection and missing defects, significantly undervaluing a property, failing to spot defects in recently decorated properties, producing flawed designs
- Solicitors/barristers – Giving incorrect legal advice, missing case deadlines, mishandling case files, not following client’s instructions, under settling a claim.
- Accountants/financial advisers – Providing bad investment advice, failing to advise on statutory requirements, errors in tax returns.
If your claim is against a medical professional, these are normally conducted under a clinical negligence procedure.
Not every loss is recoverable
Even where negligence is established, a professional will only be liable for losses that fall within the scope of the duty they assumed.
In Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20, the Supreme Court held that the scope of a professional adviser’s duty is governed by the purpose for which the advice was given, judged objectively.
The burden is on the claimant to show that the loss claimed falls within that scope. Careful analysis of what the professional was actually engaged to do is, therefore, essential at the outset.
It will be important to check the letter of engagement or review notes of what may have been agreed at the initial meeting with the professional.
Claims can also involve the loss of a chance, for example where a solicitor’s error deprived a client of the opportunity to bring a claim.
In Perry v Raleys Solicitors [2019] UKSC 5, the Supreme Court confirmed that a claimant must prove on the balance of probabilities what they themselves would have done had they been properly advised, while what third parties would have done is assessed as a loss of chance.
These types of claims can be more difficult to prove where no actual loss has been suffered.
Time limits: Act promptly
Strict time limits apply under the Limitation Act 1980.
Claims in contract and in tort must generally be brought within six years of the date on which the cause of action accrued.
Where the claimant did not know the relevant facts at that time, section 14A allows a negligence claim to be brought within three years of the date on which they had, or reasonably should have had, the necessary knowledge, if that is later.
However, section 14B imposes an overriding 15-year longstop running from the negligent act or omission, regardless of when the loss was discovered, unless the negligent act involves fraud, deliberate concealment or mistake. In these cases, the limitation period only commences when the Claimant discovers the fraud, concealment or mistake (or could have discovered it with reasonable diligence)
Calculating limitation can be complex, and a claim brought out of time will usually fail regardless of its merits. If you suspect negligence, you should take advice without delay.
The pre-action process
Before issuing proceedings, parties are expected to follow the Pre-Action Protocol for Professional Negligence (the “Protocol”).
A claimant is encouraged to send a Preliminary Notice, followed by a detailed Letter of Claim setting out the facts, the allegations and how the error caused the loss.
The Letter of Claim should be acknowledged within 21 days of receipt. The claimant should also provide copies of key documents on which it relies as part of its claim.
The Defendant professional (or in many cases, solicitors acting for the professional’s professional indemnity insurer) then has three months from the date they acknowledged the Letter of Claim to investigate and respond to the Letter of Claim, with either a Letter of Response or Letter of Settlement, or both.
Following receipt of the same, the parties are encouraged to enter into a period of negotiation to see if a resolution can be reached. Only once it becomes apparent that a resolution cannot be reached, should the claimant then consider issuing court proceedings.
The Protocol aims to help the parties identify the issues, exchange key documents and, where possible, settle without going to court.
The Protocol also encourages the use of Alternative Dispute Resolution (or ADR) to see if the dispute can be settled at a mediation or arbitration, in an attempt to avoid formal court proceedings being issued.
Claims against architects, engineers and quantity surveyors follow the separate Construction and Engineering Disputes Protocol instead.
The Protocol does not stop the limitation clock. Where time is running short, the parties can agree a standstill agreement, or the claimant can issue proceedings and invite the professional to agree a stay while the protocol steps are completed.
The courts may impose sanctions for substantial non-compliance with the Protocol.
Defending a professional negligence claim
Often, but not in all cases, the professional individual or firm will have professional indemnity insurance to cover them against claims.
As such, claimants often end up dealing with insurance companies as opposed to the individual or firm, as it will be the insurance company that will normally be responsible for the payment of any damages.
Defendants will often raise a number of different defences when defending professional negligence claims, including:
- No breach occurred – The Defendant will argue that they acted in accordance with standard industry practice
- Contributory negligence – The action of the Claimant led to the loss which has been suffered.
- Lack of causation – The Claimant would have suffered loss despite the breach of duty by the professional.
How Mackrell can help
Established in 1845, Mackrell has long experience of commercial and civil disputes, including complex claims against solicitors, accountants, financial advisers, surveyors and construction professionals.
We combine thorough preparation with a strategic approach to negotiation and proceedings and, where suitable, advise on mediation and other ADR to resolve disputes efficiently.
Through Mackrell International, we can also coordinate with lawyers overseas where a dispute involves cross-border transactions, overseas assets or foreign parties.
If you believe you have received negligent advice or services, please contact our litigation team to discuss whether you have grounds for a claim.
This article is for general information only and does not constitute legal advice. Specific advice should be sought on the facts of any particular case.
