Professional Negligence Claims: The Basics
Professional negligence claims have been on the rise in the UK for some time now. It is thought that the reason for this is largely due to the fact that work being carried out by professionals is more complex, and clients are subsequently placing more reliance on the advice they receive. Furthermore, as a society, we are now more aware of our legal rights and less accepting of loss. In times of economic downturn, those losses can be felt particularly hard, and clients may therefore wish to seek compensation from the professional that has let them down.
What is professional negligence?
Professional negligence occurs when a professional fails to perform his/her responsibilities to the level required of a reasonably competent person in their profession. The standard of the duty of care will depend on the circumstances of a case and may be higher or lower, depending on the contract and/or profession, for example. This type of claim can be made against a number of different professionals, e.g. lenders, accountants, auditors, solicitors, independent financial advisers, surveyors and insurance brokers.
Do I have a claim?
In order to bring a claim in professional negligence, you will need to establish four key elements:
1. Duty of care – professionals normally owe a duty of care to their clients. For example, when giving advice about financial products, an independent financial adviser may owe a duty of care to ensure that those products are suitable for the needs of their client, and that their client understands the risks associated with such products.
2. Breach of duty – the professional must have fallen below the standards of a reasonably competent professional, having
regard to the usual standards of that particular profession. The mere fact of error is not necessarily enough to amount to negligence. For example, failure by a lender to explain the financial implications of fixing the rate on a loan it had entered into with a customer was previously held to be a breach of duty in the case of Thomas and another v Triodos Bank NV EWHC 314 (QB).
3. Causation – the loss must have been caused by the negligence, and you may not have a claim if the loss would have occurred regardless of the negligent advice. The relevant test here is whether the loss would still have been incurred ‘but for’ the professional’s negligence?
4. Loss – the basic principle is to put the claimant back into the position he/she would have been in had the professional not been negligent. The loss must have been reasonably foreseeable, and it can be a complicated exercise to quantify or evidence this, depending on the circumstances of the case e.g. if there has been a lost opportunity. Claimants do have a duty to mitigate their losses (i.e. to keep losses down to a minimum) and should take reasonable steps to do so, where possible.
Before pursuing a claim, you should also consider whether there might be any reason for the professional to argue that you have caused or contributed to the losses suffered. This is the defence of ‘contributory negligence’. If the professional can show that you have contributed in some way to the negligence, the losses claimed may be reduced.
Are there deadlines for making a claim?
There are legal deadlines by which different types of claims must be issued. These deadlines are known as ‘limitation dates’. There are different limitation dates for different types of claims, but generally speaking, you must issue a claim within six years of the date on which the negligence occurred.
However, if you did not know a) that you had suffered damage; b) the identity of the defendant; and/or c) that the damage was caused as a result of the defendant’s acts or omissions until after the negligent act, then the clock may instead start ticking three years from the date you acquired knowledge.
In any event, there is a 15 year long stop date, which means that if you acquire knowledge 14 years after the actual breach, you would only have one year to bring a claim.
You will be ‘time-barred’ from bringing a claim after the limitation deadline has expired.
How can Ellis Jones help?
Professional negligence claims are complex. We therefore recommend seeking specialist advice from solicitors with experience of dealing with such claims, in order to best protect your position. Ellis Jones acts in relation to a variety of professional negligence claims and is therefore well-placed to provide expert advice. We may also be able to act on a ‘No Win No Fee’ basis to help minimise your risk if your claim has sufficient prospects. We can also assist with group litigation, if a number of people have been affected in a similar way.
If you wish to discuss a potential claim, please contact one of our expert Dispute Resolution team for a free initial consultation.