Professional Negligence Against Advisers.

Where a solicitor's negligence has damaged a business transaction or a legal claim, the business may have a professional negligence claim against the firm. Common examples in a business context include: missing a limitation deadline so that a valuable claim is lost; negligent drafting of a contract, lease, or other document that fails to protect the business's interests; errors in a corporate or property transaction that cause financial loss; failing to advise on a material risk; and mishandling litigation. The measure of loss is generally the difference between the position the business is in and the position it would have been in had the solicitor acted competently — which, where a claim or transaction was lost, may involve assessing what would have happened. All solicitors carry compulsory professional indemnity insurance, so claims are typically met by insurers rather than the firm directly. A claim against a solicitor is separate from any complaint to the regulator — the latter addresses conduct but does not provide compensation. Specialist advice on the strength and value of the claim is the starting point.

Yes — surveyors, valuers, and other consultants owe a duty to exercise reasonable skill and care, and a business can claim where a negligent report causes loss. For a surveyor or valuer, a claim commonly arises where: a survey failed to identify a defect that a competent surveyor should have found and reported, leaving the business with unexpected repair costs; or a valuation was negligently prepared — too high or too low — causing loss to a business that relied on it to buy, sell, or lend against a property. The measure of loss is usually the difference between the reported position and the true position — for example, the difference between the negligent valuation and the property's actual value. For other consultants, the principles are the same: a duty to exercise reasonable skill and care, breach of that standard, and resulting loss. Expert evidence from a professional in the same discipline is needed to establish that the work fell below the required standard. The terms of the consultant's engagement, including any limitation of liability, are also important.

The aim of damages in a professional negligence claim is to put the business in the position it would have been in had the professional not been negligent. How that is calculated depends on the nature of the negligence. Where negligent advice led the business into a transaction it would not otherwise have entered, the loss may be the difference between the position it is in and the position it would have been in had it not entered the transaction. Where the negligence deprived the business of a benefit it should have obtained — a valid claim, a properly drafted protection, a better transaction — the loss reflects the value of what was lost. Recoverable losses can include wasted expenditure, lost profits, additional tax or liabilities incurred, and the cost of putting matters right, provided they are not too remote and were within the scope of the professional's duty. The scope of duty is important: a professional is generally only liable for losses falling within the scope of the duty they assumed. Quantifying business loss often requires forensic accounting evidence.

Accountants and auditors owe their clients a duty to exercise reasonable skill and care, and a business can claim where negligent work causes loss. Common claims against accountants include: errors in tax advice leading to an avoidable tax liability, interest, or penalties; negligent preparation of accounts that misstate the business's position and lead to poor decisions; failures in audit work that allow fraud or error to go undetected; and negligent advice on transactions, valuations, or structuring. One important point concerns auditors: an auditor's duty is generally owed to the company itself, and following the principles established in Caparo Industries v Dickman, the duty does not automatically extend to individual shareholders or to third parties who rely on the audited accounts — the scope of who can claim is limited. Establishing an accountancy or audit negligence claim requires expert accountancy evidence on whether the work met professional standards, and careful analysis of causation and the loss suffered. These claims can be substantial and often involve the accountant's professional indemnity insurers.

Most professionals are required to carry professional indemnity insurance (PII), and for some — such as solicitors and accountants — it is compulsory. This matters in practice because it usually means there is a clear route to recovery: a valid claim is typically met by the professional's insurers rather than depending on the financial position of the individual or firm. Once a claim is intimated, the professional will generally notify their insurers, and the insurers (often through specialist solicitors) will handle the defence and any settlement. This has several practical effects: the claim is usually defended robustly and professionally; settlement decisions are influenced by the insurers' assessment of risk; and recovery of a substantial award is more secure than it might be against an uninsured defendant. It also means that engaging constructively through the pre-action process can lead to settlement, as insurers frequently prefer to resolve meritorious claims rather than incur the cost and risk of trial. Understanding that you are effectively dealing with insurers shapes the strategy for pursuing the claim.

Not necessarily — the time limit for a professional negligence claim is not always measured from when the negligent work was done. The primary limitation period is six years from the date of the breach of duty (in contract) or from when the damage was suffered (in the tort of negligence). But where the business did not know, and could not reasonably have known, about the negligence at that time, the Latent Damage Act 1986 may provide an additional three years from the date the business had the knowledge needed to bring a claim — subject to a long-stop of fifteen years from the negligent act. This is particularly relevant in business cases where the consequences of negligent advice — a defective document, a tax problem, an inadequate structure — may not come to light until years later. Identifying the correct limitation period in a professional negligence claim can be complex and depends on the facts. Because missing the deadline is usually fatal, a business that suspects negligence should take advice promptly rather than assuming it is either in or out of time.

Showing that advice was negligent — rather than merely unwelcome or unlucky — requires establishing that no reasonably competent professional in that field would have given the advice, or that the adviser failed to do something a competent professional would have done. This almost always requires expert evidence: an independent professional in the same field gives an opinion on whether the advice or work fell below the required standard. The court does not assess the standard of care from its own knowledge — it relies on expert evidence about what proper practice required. Beyond breach, your business must also show causation: that had competent advice been given, you would have acted differently and avoided the loss. This often turns on what the business would have done with correct advice — the counterfactual. Establishing both the breach and the causal link requires careful analysis of the engagement, the advice given, and what would have happened otherwise. Contemporaneous documents — the retainer, advice given, and decisions taken — are key evidence.

Pursuing a professional negligence claim follows a structured process. It usually begins with investigation: gathering the relevant documents — the engagement terms, the advice or work in question, and evidence of the loss — and obtaining expert evidence on whether the work fell below the required standard. The next step is the pre-action protocol for professional negligence, which requires a preliminary notice to the professional, followed by a detailed letter of claim; the professional then has three months to investigate and respond. Many claims settle during this process, particularly once insurers are involved. If the claim does not settle, court proceedings follow, with the case likely allocated to the multi-track, involving disclosure, exchange of expert and witness evidence, and potentially a trial. The process can take a considerable time — often a year or more to trial if the claim is contested. We charge by the hour and provide a written cost estimate at the outset, and will give a frank assessment of the prospects and the likely costs against the value of the claim before you commit.

Loss of a chance is a way of assessing damages where a professional's negligence deprived a business not of a certain outcome, but of the opportunity to achieve a better one — where that outcome depended on what a third party would have done. It often arises in business claims. For example, if a solicitor's negligence caused a business to lose the chance to bring a valuable claim against another party, the court does not simply ask whether that claim would definitely have succeeded; it assesses the value of the lost claim and applies a percentage reflecting its prospects of success. Similarly, where negligent advice caused a business to lose the chance of a more favourable transaction that depended on a third party agreeing, damages may reflect the value of that chance. Loss of a chance applies where the lost outcome depended on the hypothetical actions of a third party, rather than on what the business itself would have done (which is assessed on the balance of probabilities). It is a valuable principle that allows recovery even where success was not guaranteed. These assessments are complex and benefit from specialist advice.

A business can take practical steps to reduce its exposure and to strengthen its position if a problem later arises. These include: agreeing clear terms of engagement with each adviser, setting out the scope of the work and what the adviser is responsible for; being clear about what you are asking the adviser to advise on, and recording the instructions and the advice in writing; not assuming that a limited engagement covers matters outside its scope — if you need advice on a particular risk, ask for it expressly; keeping good records of advice received and decisions taken in reliance on it, which are invaluable if a dispute arises; checking that significant advisers carry adequate professional indemnity insurance; and reviewing any limitation or exclusion clauses in the adviser's terms, which may cap their liability. Where a great deal turns on professional advice — a major transaction, a significant tax position, an important claim — it can be worth confirming key advice in writing and, in some cases, seeking a second opinion. Good record-keeping and clarity about scope are the most valuable protections.

Not every mistake or disappointing outcome gives a business a claim — a professional is liable only where their work fell below the standard of a reasonably competent practitioner in their field, and that failure caused the business a financial loss. A professional is not a guarantor of a good outcome; they are required to exercise reasonable skill and care, not to be perfect or to achieve the result the client hoped for. So a claim arises where three things come together: the adviser owed your business a duty of care; they breached it by doing something a competent professional would not have done, or failing to do something a competent professional would have done; and that breach caused a quantifiable loss. A commercial decision that simply turned out badly, despite competent advice, is not negligence. Distinguishing a negligent error from an unfortunate outcome is the first question in any claim, and one on which early legal advice is valuable.

A business relies on many professional advisers, and most can be liable if negligent work causes loss. These include: accountants and auditors, for errors in accounts, audits, or tax advice; solicitors and barristers, for negligent legal advice, drafting, or conduct of a matter; surveyors and valuers, for negligent surveys or valuations of property the business buys, sells, or lends against; financial advisers and brokers, for unsuitable advice or arranging inadequate insurance; architects, engineers, and other construction professionals, for negligent design or supervision; and a range of consultants and specialist advisers. The common thread is that the professional owed the business a duty to exercise reasonable skill and care, and fell short. The precise standard expected, and the scope of the duty, varies by profession and by the terms of the engagement. Identifying who owed what duty — and whether the loss falls within the scope of that duty — is central to any business professional negligence claim.