Whether you are a business owner or an individual, you may often rely on external advisers to provide specialist advice such as accountants, lawyers, tax advisers, and valuers. Sometimes, that advice falls short of what is expected of a competent professional and can lead to losses by the company or the individual who has instructed the professional to provide advice.

In those circumstances, it may be possible to take legal action in professional negligence against the professional who has failed to perform their responsibilities to the required standard.

While a negligence claim can be brought by the individual who directly instructed a professional, third parties may also be able to bring an action against the professional, depending on the circumstances.

If you feel that you have been let down by a professional, perhaps because you received wrong advice or poor service, and this has caused you loss, then you may be able to bring a professional negligence claim against that professional in tort and/or in a contract. To do so, there are four elements to be satisfied:

• The professional must owe you a duty of care
• There must have been a breach of that duty
• The breach of duty must have caused a loss
• The loss must have been reasonably foreseeable

To establish each of those elements, it is necessary for us to carefully review the material documents - for example, any client care correspondence, terms and conditions, emails, letters, and file notes - and to take further details of the events that took place leading up to the loss suffered. The professional negligence solicitors at JMW can help you to identify and gather this evidence. We may also need to obtain independent evidence from an expert to support the claim that the services provided fell below the standards of a reasonable professional in that profession and to identify what the correct advice or conduct would have been.

There are strict time limits for pursuing a professional negligence claim, known as a limitation period. For many claims, the period for commencing a claim is six years from the date when the negligence arose. However, the negligent act or omission may not be discovered until a later date and in such circumstances, the period for commencing a claim may be extended to three years from the date when the claiming party knew or ought to have known of a potential claim. It is therefore essential that where you or your business has suffered loss as a result of the negligence of a professional, you act swiftly in instructing solicitors to review your matter to limit the risk of you being unable to pursue a claim because it is out of time. Our professional negligence solicitors can calculate this date for you.

It is possible to bring a professional negligence claim as a breach of contract. In a contractual claim, the cause of action is said to be completed as soon as the contract is breached. The contract between a professional and their client regulates the basis of professional liability and is the source of the professional duties owed to the client. Most well-drafted commercial contracts will include obligations under the contract, and a clause that refers to the reasonable care and skill of the professional. Accordingly, if conduct falls below that bar, there may be a breach of contract.

A key factor to bear in mind when bringing a contractual claim is that the six-year limitation is activated as soon as the contract is breached.

An alternative option is to bring a claim in tort. As a general rule, professionals are taken to have assumed responsibility towards their clients and so owe both a duty of care in tort and contractual obligations. A duty of care in tort can arise whether or not there is a contractual relationship between the parties.

To establish a claim in tort, it must be determined whether or not the professional person provided advice that no other competent person in that profession would provide, and that the client suffered losses (usually financial) as a result of this.

In order to answer the above question, there are four essential elements to a professional negligence claim in ‘tort’:

• Duty, and the scope of that duty
• Breach of duty
• Causation
• Damage

Duty

The claimant is required to establish that the professional owed a duty of care, which included preventing the harm that followed. The claimant will need to show that:

• The damage was foreseeable;
• There is a close proximity of the relationship between the parties; and
• It is fair, just and reasonable to impose a duty of care.

Breach of duty

Once duty has been established, the claimant is then required to show that the standard of advice received from the professional person was below the standard of care owed; i.e., that the professional made an error that no other competent professional in that area of expertise would have made.

Causation

When the duty and breach of duty have been established, we can move on to causation. Often in professional negligence claims, the causation element is the most difficult to prove, because the claimant is required to prove that the breach of duty caused loss. This element is usually proven using the ‘but for’ test: “But for the negligent advice of the accountant, X company wouldn’t have lost £X.”

During the course of establishing causation, a defendant may argue that there was an intervening act that may have ‘broken the chain’ of causation. 

Damage

Once the above three elements have been proven, a court would look at damages. The damages must:

• Fall within the scope of duty that the professional owed the claimant;
• Not be an economic loss; and
• Be a foreseeable consequence of the defendant’s breach of duty.

Where there is a concurrent duty in both contract and tort, you can choose whether to bring action in contract or tort with the help of legal specialists. An important factor that might determine your choice is limitation. While the basic limitation period in both claims is six years, in contract cases, the cause of action is completed as soon as the contract is breached. In contrast, no cause of action accrues in tort, until all elements of duty, breach, causation and damage are present. As a result, if a contractual claim has passed limitation, it may still be possible to bring a tortious claim in professional negligence.

HMRC publishes a list of tax avoidance schemes. If you have been advised by an accountant or a tax adviser to invest in one of these schemes and have received correspondence from HMRC, there may be a professional negligence claim,depending on the circumstances. It is important to seek urgent legal advice to determine your options.

This depends on the individual circumstances, but as a rule, if a professional person has acted in conflict with the interests of the business, there may be a breach of fiduciary duty.

A professional person owes a company or an individual (depending on who the client is) a duty of loyalty, known as a fiduciary duty. If the professional person abuses that relationship, this may be classed as a breach.

If a professional person has become ‘conflicted’ - i.e., they have acted against your company when engaged as your professional adviser - you should refer the matter to a professional regulator.

If a professional person has provided you or your business with advice that you believe has caused you loss, seek urgent legal advice from JMW’s specialist professional negligence solicitors.

The term 'damages' is used to refer to the level of compensation awarded for the loss that can be attributed to the negligence, and the aim of ‘damages’ is to put the claiming party back in the position they would have been in had the professional not been negligent.

While 'negligence' refers to the action of treating something or someone with neglect, 'professional negligence' is a specific legal term that encapsulates any action or lack thereof by a professional who owes you a duty of care when providing their services. This may be actionable through any legally binding agreements that the parties may have entered into, or implied through their type of work; for example, legal professionals are held to the standard of a reasonably competent solicitor specialising in the area of law in which they practice.

Due to the variety of factors that professional negligence disputes involve, there is no set amount of time that they are held to - your claim could take anywhere from a few months to over a year. The amount of time professional negligence claims take depends on a variety of factors, such as the complexity and nature of the case, the amount of evidence you are able to provide, and whether the other party disputes your claim.

Your solicitor will be able to provide you with an estimate of how long they expect your claim to take.

Professional negligence is a matter of civil litigation.