Professional Negligence: Can You Sue a Solicitor or Accountant for Bad Advice?

Recent figures published on the Legal Futures website show that more than half of professional negligence cases issued in the English High Court over the past five years were against solicitors. However, when it comes to claim size, accountants face the biggest payouts, with an average litigated claim value of £97m – almost 20 times higher than any other profession. Solicitors come in second, with claims averaging £4.8m.

These numbers underline an important point: although professional negligence can arise in many sectors and claims potentially brought against any professionals who hold themselves out as experts in a given field, it is most associated with regulated professions, such as solicitors and accountants.

To ensure public trust, solicitors and accountants are held to high professional standards with oversight from their regulatory bodies. Submitting complaints to those regulatory authorities can provide efficient ‘out of court’ remedies (such as financial penalties for the professional or striking off) to deal with inappropriate or incorrect advice. However, these measures are unlikely to result in compensation for losses suffered. The most efficient way of seeking compensation in the form of damages as a result of the actions or inactions of a professional, is to issue a claim for professional negligence.

What Is Professional Negligence?

At its core, professional negligence occurs when a professional fails to exercise the skill and care that is reasonably expected of them when providing their services. This leads to their client suffering financial loss as a result.  It could, for example, include a professional failing to act or follow instructions, or giving misleading or incorrect advice, which has resulted in loss.

This duty arises expressly under a contract (such as a formal retainer letter) and in tort, which means you may be able to bring a claim in negligence even if you do not have a contractual relationship with the professional.

Distinguishing between contractual and tortious claims is particularly relevant when considering the Limitation Act 1980, which sets out the time limits for bringing a claim in professional negligence:

• For claims in contract, the limitation period is six years from the date of breach.
• For claims in tort, the limitation period is six years from when the damage occurs (i.e., when the loss is suffered). Alternatively, a three year limitation period which begins to run from the date of knowledge of the damage – this period, however, has a long stop date of 15 years.

Once the relationship has been established (contractual or otherwise), which is otherwise known as the ‘duty of care’, you need to establish that the duty of care has been breached.  

When considering whether an act or omission has breached this duty, the court will usually look to what would be expected of a reasonably competent professional in that specific field, and whether or not the act or omission of this particular professional fell short of that.

To succeed in a professional negligence claim, the party bringing the claim must also prove causation. In other words, they must demonstrate that, ‘but for’ the professional’s negligence, the loss would not have occurred; and that the type of loss suffered was something that could reasonably have been expected as a consequence of the professional’s actions or inactions.

Things to Consider Before Taking Legal Action

Duty of Care – Even to Third Parties

A formal contractual agreement isn’t always required to bring a claim. The courts have, in many cases,  decided that solicitors and accountants may owe a duty of care to third parties who rely on their work, even if those parties aren’t involved in a contractual agreement. Such scenarios are reviewed on a case-by-case basis, as generally solicitors and accountants do not owe duties of care outside of a contractual relationship.

Limitation and Continuous Advice

The time limit for bringing a claim doesn’t always begin from the moment when the advice is given. If negligent advice was acknowledged during the course of the retainer but the professional made attempts to put things right, the courts may find that the limitation period starts later.

By contrast, where there’s no reassurance or continuing duty, the courts have been stricter, even if the client was ‘hopeful’ that things would turn around for the better (Al Sadik v Clyde & Co, Sciortino v Beaumont). Each case turns on its facts, so seeking early legal advice is essential when considering taking action against a professional.

Do Disclaimers Block Claims?

Many professional retainers contain exclusions or disclaimers. However, these are not always enforceable – particularly if they are unfair or attempt to avoid liability for negligence altogether. Courts will scrutinise disclaimers closely, and in many cases, they won’t provide protection against claims where solicitors or accountants are in breach of their professional duties or negligent.

Can You Sue Over Free or Initial Advice?

Even ‘free’ advice can create legal liability. In Burgess v Lejonvarn, an architect friend was held liable for negligence after giving extensive unpaid advice on a landscaping project. Payment or contractual agreement does not solely give rise to a claim in professional negligence. The key question is whether the professional assumed responsibility.

Consequently, brief, informal comments are less likely to be actionable, but ongoing input, even without a contract, may still give rise to a duty of care.

Conclusion

Whether you are a corporate or an individual, suing a solicitor or accountant, professional negligence is not a straightforward and; complex issues of duty, causation, damages, limitation, and disclaimers often arise. If you have suffered a financial loss because of negligent advice, you may have a claim, and therefore, we strongly recommend you seek legal advice to establish whether you have a claim.