Professional negligence is the failure of a professional to act with reasonable care and skill in carrying out their services. If you have engaged a professional with skills in specialised trade and services, and they have failed to undertake their job properly, causing detriment to you, there may be a claim for professional negligence available.
There are three main elements to establishing a professional negligence claim:
1. That the professional owed you a duty of care;
2. That the professional breached that duty, performing work below the acceptable standard; and
3. That you suffered losses as a result, being injury or damage due to the breach of duty by the professional.
The kinds of services to which this applies are broad, and can include builders, architects, doctors, veterinarians, lawyers, engineers, surveyors, auditors, accountants, valuers, real estate agents, financial planners, bankers, alternative health professionals and others.
Professional negligence commonly takes into account misleading, incorrect or incompetent advice or services. For example, there may be a claim for professional negligence against an account where the accountant gives you incorrect tax advice, prepares tax returns and financial statements containing substantial errors, failing to advise of significant taxation consequences in a certain transaction, or failing to lodge documents properly or on time.
Examples in other fields include engineering mistakes, real estate misrepresentations, incorrect property valuations, architectural or building mistakes, recommendations to invest in overly risky products or products which do not meet your expressed objectives, giving incorrect legal advice or acting without proper instructions.
When you make a claim for professional negligence, the purpose of the claim is aimed at returning you to the financial position you were in before the negligent professional service had been rendered. This includes past and future profits you may have lost, as well as expenses likely to accrue in trying to rectify the negligence, including your legal costs.
As most professionals are required to have professional indemnity insurance, a successful professional negligence claim is usually paid out by the professional’s insurance provider.
The legislation covering professional negligence is state-based, and therefore differs from state to state. Depending on the specific legislation, the time limit for lodging such a claim is typically three (3) to six (6) years from the day your loss occurred, that is, when you suffered damage as a consequence of the breach of the duty.
The applicable legislation in New South Wales is the Civil Liability Act 2002.
Establishing a professional negligence claim is not always so simple as merely ticking off the three elements listed above. While you may be dissatisfied with certain professional services, establishing professional negligence is a serious step requiring careful consideration by the Court.
Some of the further factors in play include consideration of what exact standard of care is expected in your specific circumstances, the relevance of peer professional opinion as to what competent professional practice is, any contributory negligence by you or another person, and vicarious liability.
If you are considering whether or not you have favourable prospects for making a claim for professional negligence, please do not hesitate to get in touch with our office to discuss.