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From time-to-time, you may require the services of an external professional to assist your organisation.
By their very nature, you would expect a professional to be skilled, competent and qualified in their chosen field. However, situations can arise where a professional provides incorrect or negligent advice, be that deliberately or accidentally, which can have a major impact on your organisation.
Professional negligence claims are based on the principles of tort (‘an action that is wrong’) and are not reliant upon on an existing contractual relationship. A contractual claim and a tort claim can be distinguished from each other but can also run in parallel.
There is no requirement for a contractual relationship and can arise of its own accord.
To establish a professional negligence claim, you will need to:
A professional has a duty of care to provide a service to a reasonable standard.
Whilst there is no exact test for what the courts will look for to assume a professional has a duty of care, they will consider:
Overall, it must be fair and reasonable for the court to impose a duty of care on a professional. What is deemed fair and reasonable will depend solely on the facts of each case.
Once a duty of care has been established, the professional is then under an obligation to provide their service to a reasonable standard.
The test for a reasonable standard is objective and is judged on what a hypothetical personacting reasonably, would deem to be a reasonable standard of service.
Whilst you may rely upon expert advice to help support an alleged breach of duty, merely showing that another professional in the same field would have given different advice is likely to be insufficient. You will need show that the professional’s field generally views the advice as falling below the reasonable standard.
To establish a professional negligence claim, there needs to be a clear link that the breach of duty was the cause of the loss incurred, which is known as causation.
Causation can be determined by using the “but-for” test, asking yourself: “would I have suffered the loss but-for the negligence of the professional?”
If you would have suffered the same loss without the negligence occurring, your professional negligence claim would not be successful.
Careful consideration should also be given as to whether you or your organisation has contributed to the loss in any way. Whilst it is unlikely to completely diminish the professional’s liability, it may reduce the damages you can recover.
In some cases, you may be put at a disadvantage by a negligent action that leads to a loss of chance. These claims rely on hypothetical scenarios to determine the value of the loss.
This aspect of a professional negligence claim assists parties in being able to claim for a loss of opportunity, such as loss of contracts, loss of opportunity to tender or loss of future customers and sales arising from a negligent act.
When a third party is involved in the hypothetical scenario, the court will only allow a claim when there is a real or substantial chance that the loss would have occurred. In determining such cases, the courts will proportionate out the likelihood of different scenarios.
For example, if your organisation loses the ability to tender for a new contract worth £1m through a negligent act, the court may determine that you had a 70% chance of winning the contract and therefore award you £700k worth of damages.
Where concerns of professional negligence arise, you must immediately try to limit the loss by taking reasonable steps.
If you have continued to freely allow the loss to build up or taken steps that have resulted in the loss increasing, you will be limited as to what you can recover.
As professional negligence only becomes apparent after the negligence occurs, you can try and limit your losses by choosing qualified and recommended professionals who have a strong background in the specific area that your business requires.
As a general rule, you have six years to bring a claim for professional negligence from the date the negligent act occurred. There are, however, some possible exceptions, so we recommend that you seek advice from experienced lawyers as soon as you become aware of the negligence.
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