Professional Negligence

‘Every person who enters into a learned profession undertakes to bring to the exercise of it a reasonable degree of care and skill. He does not undertake, if he is an attorney, that at all events you shall win your case, nor does a surgeon undertake that he will perform a cure; nor does he undertake to use the highest possible degree of skill.

So said Tindal CJ in Lanphier v Phipos back in 1838, and the same is true today. A professional is required to possess a minimum degree of competence and to exercise reasonable care in the discharge of his or her professional calling.

When a lawyer is instructed by a client, the retainer that arises contains both express and implied contractual obligations. Express terms should be set out in writing and agreed before the work is undertaken. Usually they will be taken to incorporate compliance with the rules of the professionals governing body. This would include, but not necessarily be limited, to performing the professional work in such fashion as might be expected from a reasonably competent professional of that calling.

The contract you enter into will also contain implied obligations. Whilst these include an obligation to exercise reasonable skill and care, it is much more complex than that. A contract for the services of a professional gives rise to a multitude of rights and duties of which to exercise reasonable care and skill is but one. The precise extent of implied obligations and duties depends upon and must be related to the terms and limits of the retainer in any particular case which are questions of fact to be decided in each case.

For example, if you instruct a solicitor to act for you in the purchase of a house it is to be expected that you will obtain good title to the property free of any encumbrances of which you were not made aware. If you instruct an accountant to deal with your tax affairs you are entitled to expect not to have to pay unnecessary tax.

The extent of the duty is therefore to do that which a reasonably competent practitioner would do having regard to the standards normally adopted in his profession judged by the standards prevailing at the time the advice as given. Not every mistake constitutes negligence or breach of duty. It is necessary to establish that no reasonably competent professional would have acted in this way. What is a reasonable degree of care and skill will be is usually what the reasonable expectation of the client might expect.

If you are given advice by a professional, there will be a duty to take reasonable care that the advice given does not cause any foreseeable loss.

‘Only if it is foreseeable that if the advice is negligent the recipient is likely to suffer damage, that there is a sufficiently proximate relationship between the parties and that it is just and reasonable to impose the liability’. Per Lord Griffiths in Smith v Eric S Bush (1990).

It is essential therefore to consider whether there exists a causal connection between the breach of duty alleged and the loss incurred. If not, and no loss has occurred damages will not and cannot be awarded. If the loss would have incurred in any event or if it was too remote from the breach alleged or if the chain of causation has been broken by an act or omission of the Claimant or a third party, there can be no basis for a claim.

Thus, in Sykes v Midland Bank Executor and Trustee Co Ltd (1971), it was held that because the Claimants would have entered into an under-lease even if properly advised by their solicitors, only nominal damages would be awarded.

Allegations of professional negligence are often made as a result of a claim by the professional to recover outstanding fees. Allegations of negligence should be raised before a dispute arises and litigation has commenced. The parties should always comply with the pre action protocol (see below) to resolve disputes before either party commences litigation. If litigation has already commenced, it will be a matter for the Court whether sanctions should be imposed against either party for not complying with the protocol. In any event, the parties should apply to the Court for a stay to allow the protocol to be followed.

The Characteristics of a Professional Negligence Claim

Allegations of negligence chill the blood of most professionals. Unlike many claims arising from a commercial relationship, the professional is likely to feel that his expertise and reputation are being challenged. Perhaps irrationally but consistent with human nature, the professional may therefore respond at least initially as though he has been personally insulted. 

Negligence is likely to be denied as to admit will be a breach of the professional’s insurance. Solicitors, accountants, and the like must carry professional indemnity insurance which means that a valid claim will be paid out under the insurance policy. There is likely to be an obligation to inform the insurer as soon as allegations are made and pass the claim to them to deal.

The fact of being insured makes professionals fair game for some Claimants and this is known. It should not be though that the professional or his insurer will cave in easily. However, most professional indemnity insurance is written with a substantial excess which may well be lost to the professional in terms of his insurers’ premium, win or lose. Claims, whether or not paid out by the insurers, will adversely affect the professional’s renewal premium. There is therefore pressure on the professional to settle, at least within the excess.

It is a fundamental principle that a party in a civil claim must prove their case on ‘a balance of probabilities’, i.e. more than 50% probable. To do so in a case which is not clear-cut, the Claimant will require evidence from an appropriately qualified expert. There is a catch here. The client will need that evidence before issuing to ensure that he has at least an arguable case. The professional or his insurers will probably obtain their own expert evidence. If matters rested there, the two experts would battle it out in Court if they could not agree – all well and good. 

However, the Court Rules and Judges prefer that there be a single joint expert – who obviously will not be one of the parties’ experts – and this introduces the twin evils firstly of uncertainty of outcome and secondly of further expense, at a stage when costs may well already be considerable. On the other hand, the findings of a single joint expert are very likely to resolve the dispute at least as far as the issues on which the expert is appointed are concerned.

The Professional Negligence Pre-Action Protocol

The purpose of the protocol is to establish a framework for the early exchange of information to facilitate investigation which could lead to negotiation and settlement outside of court proceedings. There are a number of different protocols applicable to different professions but they all require as an initial step the writing of a formal ‘letter of claim’. 

The letter of claim must contain basic information concerning your claim, an indication of how much is being claimed and the request that the professional indemnity insurers are informed. It should be an open letter (that is not written ‘without prejudice’). A chronology of events should be included if appropriate, together with copies of relevant documents.

An acknowledgement of the letter of claim must be sent within 21 days. The professional (or more usually his insurers) will then have three months to investigate and hopefully put forward proposals for settlement. Within this time a response letter must be sent by or behalf of the professional with a detailed reply to the allegations and either an admission or denial of liability. If satisfactory settlement proposals are not received, you may then proceed to issue court proceedings.

Professional Negligence Protocol Letter of Claim

As soon as the Claimant decides there are grounds for a claim against the professional, you should write a formal letter of claim to the professional.

It should include the following:

  1. the identity of any other parties involved in the dispute or a related dispute.
  2. a clear chronological summary (including key dates) of the facts on which the claim is based. Key documents should be identified, copied and enclosed.
  3. the allegations against the professional. What has he done wrong? What has he failed to do?
  4. an explanation of how the alleged error has caused the loss claimed.
  5. an estimate of the financial loss suffered by the Claimant and how it is calculated. Supporting documents should be identified, copied and enclosed. If details of the financial loss cannot be supplied, the Claimant should explain why and should state when he will be in a position to provide the details. 
  6. if you are seeking some form of non-financial redress, this should be made clear.
  7. confirmation whether or not an expert has been appointed. If so, providing the identity and discipline of the expert, together with the date upon which the expert was appointed.
  8. a request that a copy of the letter of claim be forwarded immediately to the professional’s insurers, if any.

The letter of claim is not intended to have the same formal status as a Statement (or Particulars) of Claim. If, however, the letter of claim differs materially from the statement of claim in subsequent proceedings, the Court may decide, in its discretion, to impose sanctions.

If the Claimant has sent other letters of claim (or equivalent) to any other party in relation to this dispute or related dispute, those letters should be copied to the professional. Always beware of limitation periods (usually 3 years) and that the sending of letter of claim does not stop the limitation period from running.

A claim may be made using prescribed court Form N1 or MCOL. It will usually be best to attach separate Particulars of Claim. The particulars of Claim must contain a Statement of Truth. 

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