If you are a business or an individual acting in a professional capacity, then there is always the possibility that you could at some point face a professional negligence claim. But what is professional negligence? How do you avoid someone making a claim against you or your business? And how can you protect yourself in the event of someone claiming?
What is professional negligence?
Professional negligence is when a business or an individual acting in a professional capacity, fails to perform their job to the required standard causing loss to another person. This can be caused by carelessness, recklessness, or if the service/goods are so substandard they cause a loss or damage.
- Claims can be made on one or more of the following:
- Breach of statutory duty.
- Breach of fiduciary duty.
- Breach of duty of care owed in the tort of negligence.
- Breach of a contractual term (express or implied).
Professional negligence covers a range of different industries, workplaces and professionals. Professionals covers any individuals or businesses that have skills and abilities within the industry that are beyond the skillset of someone outside the industry. It can therefore be applied to IT professionals, builders, surveyors, solicitors, personal trainers, and engineers, to name a few.
The key points of professional negligence
Professional negligence can be confusing and to understand it fully, you need to understand the key points. These are:
- Duty of Care. For a professional negligence claim to be made there has to be proof that the professional involved owed a duty of care. This is often specified in contracts and letters.
- Breach of Duty of Care. As well as proving that there was a duty of care, there also needs to be proof that the duty of care has been breached, i.e. that the service/goods were not at an acceptable level.
- Causation. This is where the claimant will need to evidence that they have suffered a loss as a result of the breach of duty of care.
- Loss. This involves determining whether a loss has occurred and by how much. It also looks at the preventative measures the claimant has made to protect themselves against such losses. A claimant can only recover damages for losses that a court deems reasonable.
- Time Limits. It is important to remember that all professional negligence claims are subject to a time limit. If someone wants to make a claim they have to do it within a certain time frame, there is a six year limitation period under the Limitation Act 1980.
Protecting yourself from professional negligence
There is no way to completely prevent someone from making a professional negligence claim against you, however, there are ways to protect yourself, limit your losses and make sure their professional negligence claim isn’t successful.
- Contracts. Clear and unambiguous contracts are a very effective way to mitigate risk. Make sure your description of services are specific and limit liability by restricting the damages either party can claim. Exclude any consequential losses and provide a performance standard no greater than reasonable care and skill.
- Complaints. Having a regular complaints procedure can really help to reduce the risk of professional negligence claims. A complaints procedure is designed to record and investigate all complaints fairly, then determine if a complaint is upheld and how you can remedy the situation. This helps to prevent complaints from escalating into expensive negligence claims.
- Risk Management. Every business needs an effective risk management strategy that is tailored specifically to their business. This should incorporate professional training, a qualification program and a file audit process. In addition to a conflicts of interest policy and procedure, a written guidance for customer engagement, a second check of sign-off procedures and having contracts checked by a legal professional.
- Professional Indemnity Insurance. This insurance policy will cover any legal fees associated to a professional negligence claim and any damages that occur as a result. There are two common options for this policy type. The first is a negligence policy which provides cover if you breach your duty of care. The second is a civil liability policy, which provides cover for negligence, breach of contract/trust, and breach of fiduciary/statutory duty.
Seek Legal Advice
If you do find yourself facing a professional negligence claim the best thing you can do it to seek legal advice as soon as you can. In order for a professional negligence claim to be successful the claimant needs to have proof and evidence. A legal professional can request this evidence at the start of the claim, potentially having the case thrown out of court before it’s even got there. They can also help you to settle outside of court, potentially saving you a lot of time and money.
