What is professional negligence?

Professional negligence is when one person provides professional and specialised services (financial advisors, accountants, tax advisors, lawyers, surveyors or brokers) and is reckless, carless or delivers unsatisfactory work. Consequently, this causes some kind of damage to someone else (or a business). The business or person is able to claim financial loss via a professional negligence claim.

A few examples of professional negligence claims might include when:

• Your financial advisor recommends you invest in products which are too risky for you
• Your accountant provides incorrect tax advice
• Your lawyer fails to act before the expiry of the statutory limitation period

What is important to note is that a professional is anyone whose primary source of income is what they are being paid to perform, rather than performing the task as a hobby or a favour. 

Who can make a claim for professional negligence?

Anyone who has suffered loss or damage is able to claim professional negligence. This should be done with the assistance of a qualified legal practitioner as you will need to establish that the professional owed both a duty of care to them and, in turn, breached that duty of care.

When making a claim, there are also several other factors that could have contributed to the negligence that could be considered including: 

• Proximity between the injured person and professional for a duty of care to exist;
• Standard of care expected, and care taken in the circumstance;
• Contributory negligence of injured person, and existence of any vicarious liability; and
• Attitude of professional, or manner of service.

When considering if harm was caused, you can consider all forms of injury or loss, such as:

• Physical or psychological injury;
• Pain and suffering;
• Damage to someone else’s property; and
• Pure economic loss, both past and future.

This must have been caused to the recipient or claimant, by the professional who has breached their duty of care.

What are the damages you can claim for?

In professional negligence claims, the compensation is determined on a case-by-case basis. This is determined by the Court after evidence has been provided, particularly from other professionals on what the standard of skill would be considered reasonable. Possible damages could include:

• Any financial loss suffered as a result of the loss or damage;
• The extent of any injury;
• The effect of the loss or injury on the person’s ability to earn;
• The extent of any damage to personal property; and
• The type of personal property involved.

What is the time limitation for making a claim?

When dealing with negligence, proceedings must be started within three years from the date on which the action (the harm resulting from the breach) arose. It is important you seek legal help as soon as possible to stand the best chance of recouping any losses you might have suffered.