Posted: Monday, 1 March 2010 @ 14:42
It is a fact about modern business life that we all need to instruct independent professionals to advise us in our business. These professional may advise us on financial matters (accountants, financial advisors, etc.), the law (solicitors, barristers, other lawyers, etc), information technology (IT consultants, software and website developers, etc), land, property and plant (surveyors, land agents, various specialists on plant and machinery) as well as general experts such as project managers and business advisors of all sorts.
What all these professionals have in common is that they are human and therefore prone to errors - and, if they make a mistake while working for you, it could be very costly.
However, not all mistakes mean you have a good claim. The law is complicated and it is vital that you take early advice from a solicitor with experience in professional negligence cases. Some of the main things to consider are set out below.
Exactly what did you agree they would do? Do you have a contract in place? Are there any exclusion clauses?
The starting point is to look at the contract you have with the professional.
Sometimes there will be a written contract containing all the terms you agreed with them as well as the professional’s standard terms and conditions.
However, as often as not, there will not be such a contract. Often, what you agreed will partly be contained in documents such as proposals, instructions, terms of engagement, emails, etc, and partly in meetings and telephone conversations that were not set out in writing.
It is not uncommon for certain things to be in writing but not everything. For example, you might need a new piece of machinery for your factory. You have several meetings with specialist advisors, you show them around your factory and explain how things work and then you ask their advice on what would be suitable for you. They later advise you that a particular set-up would be suitable and send you a contract which deals with you buying the equipment and them installing it, but it says nothing about the advice they gave.
Legally, a contract doesn’t have to be in writing but it certainly helps in proving to a court what was agreed if it was.
Once you have your contract and other documents in front of you, you should first look to see exactly what the professional agreed to do. If important things are not in any document, write a note or statement as soon as possible, saying what was agreed, how and when.
It is normal for a professional’s terms and conditions to attempt to exclude liability for certain things. You should look to see whether what you are complaining about is excluded in these terms and conditions.
Even if it is, the terms and conditions might not be enforceable. Often they will only be enforceable if they are “reasonable” and what a court considers reasonable depends on the precise circumstances in your case.
When you look at the contract, you might discover that the professional did not do something they had contracted to do. If so, you would have a claim against them for breach of contract.
However, businesses often complain that the advice they were given by the professional was wrong or not as good as it could have been and it cost them money.
Legally, a professional is negligent if the advice given fell below the standard that a reasonable professional in their sphere of expertise would give. Another way of looking at it is to turn the test around: was the advice given such that no reasonable expert would have given it?
It is not sufficient for you to show that you were not given the best advice possible; you must show that it was so bad that no reasonable expert would have given it.
In order to prove whether the professional was negligent, it is usual to go to an independent expert to ask for their opinion – not on whether they would have advised or done things differently, but on whether the professional you are complaining about was so bad as to have been negligent.
It is one thing to prove that the professional has been negligent but quite another to prove that it is their negligence that caused your losses.
It is useful first to consider what you would have done had you been advised properly. If you would have acted in the same way anyway, you will not have a good claim.
You will then need to go on and show that the negligence has directly caused you financial loss.
In general (and much will depend on any exclusion clauses in the contract), you can expect to recover losses directly caused by the professional’s negligence.
You can also recover other losses but much will depend on what they are and what the professional knew about you and your business when you agreed the contract.
What you should do if you think you have a claim:
- Get all your paperwork together and put it into date order.
- Write a statement, in date order, saying exactly what happened from when you first contacted the professional until now.
- Write a note of exactly what you consider the professional did wrong and why.
- Write another note detailing what losses you have suffered and how.
- Contact your solicitor to get some initial advice on whether you have a claim.
If you have prepared the above statement and notes, they should be able to advise you quickly on whether you have a case worth investigating further.
For advice on whether you have a claim and help with your claim contact Gary Cousins, experienced litigation solicitor who regularly advises clients on professional negligence claims. Call Gary on 0121 778 3212 or email Gary here.
Blog by Gary Cousins
Gary has been providing legal advice to shareholders, directors and business owners for over 25 years. Specialising in dispute resolution Gary is based in Birmingham with clients throughout the UK and overseas. View profile
This blog is not intended to constitute legal advice, nor is it intended to be a complete and authoritative statement of the law, and what we say might be out of date by the time you read it. You should always seek legal advice to confirm whether or how any information in this article applies to your particular situation. We offer a free telephone consultation
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