Smaller businesses are much less likely to suffer from the negligence of a solicitor or an accountant as compared to the big businesses. But when it comes to overall impact of such negligence, it can devastate smaller businesses. However, small businesses do have options to claim compensation from a professional in case of losses arising out of bad advice given by the professional. Small businesses should not let the lack of cash, in-house legal team or time to deter them from making the rightful claim.
A small business can make a professional negligence claim on account of:
1. Contracts that may be impossible to terminate when needed or contracts that allow the other party to terminate the contract without your consent leading to monetary loss.
2. Bad advice given on company structure or taxes which results in higher cost.
3. An accountant misappropriating the company money.
4. Property purchases which turn out to be bad investments due to bad advice such as not obtaining the rights of way.
5. Incorrect survey which leads to purchase of defective investment property.
6. Bad advice given for investments that turned out to be far riskier than expected.
7. An insurance policy which did not cover what was expected.
It is important to note that one cannot make a negligence claim if it did not result in a loss. Therefore, you need to calculate your loss before making the claim.
In case of property investment, the loss can be the difference between the actual price paid and the actual value of a defective site. It can also include time and money spent on putting it right including cost of management time. Interest can also be included in the claim.
As a rule of thumb, losses less than £10,000 are not worth pursuing legally. It is better to make the claim in the small claims court. However, if the losses exceed £10,000, a professional negligence claim may be a worthwhile exercise.
Things You Need to Prove
1. You need to have evidence to show that the concerned professional had a duty of care either due to a contractual obligation or due to your business relationship and that professional needed to be extremely careful in their work.
Most of the times, a contract is usually made out between a professional and a business when they start their relationship but even if the contract is not present, a claim can still be made under general law.
2. It needs to be proved that the professional has done a bad job in doing his duty. This is usually assessed by comparing the work of that professional with another professional in the field. This comparison is usually made by an independent expert.
The Process of Making the Claim
Once you have done the loss calculation as well as the above mentioned evidence, you may proceed to making the actual claim.
1. Collect all documents
You need to collect as much documentary evidence as you can. It may include all the e-mails communication between you and the professional as well as the original contract signed between the business and the professional. You should also include the cost of management time spent in dealing with the issue.
2. Filing a complaint
You can file a complaint along with the collected documents to the professional. In case the offer of compensation offered is not satisfactory or if the professional refuses to reply, then you can proceed to take legal advice regarding the issue.
3. Check the insurers of the professional
You need to ensure that the insurers of that professional are notified by now of such a claim. It is important for them to be notified so that you can go ahead with the claim without being concerned about the ability of that professional to pay.
4. Claims up to £150,000 against insurance brokers or financial advisors
If your claim is against a financial advisor or an insurance broker, it is quite possible that you may receive compensation from Financial Ombudsman Service. The service can make an independent assessment of your claim and award the compensation so that you do not need to go to court to make the claim.
5. Solicitor needs to send a letter of claim
If the above fails, then your solicitor may need to send a letter of claim and the professional will need to provide a satisfactory reply to the claim made within a period of three months. An out of court settlement should be considered at this point of time.
6. If everything fails, start legal proceedings
If none of the above works, there is no option other than to go to court and make the claim. The court will take a look at all of the documents along with expert opinions. Usually, the whole legal process may take anywhere up to 2 years from letter of claim to the trial.
It is important to note that both the parties can agree to an out of court settlement at any point of time.
Most of the times, a high proportion of the legal costs of the claimant is paid by the losing defendant. However, in case the claimant loses, he or she is liable to pay the legal costs of the other party. But these legal costs can be insured before going to trial.
There are solicitors who fight the case on “no win no fee” arrangement which means that they will take their fees when they win the case and these fees can be paid out from the damages recovered.
Similar to other legal claims, professional negligence court claims also have a time limit. As per the law, the claim needs to be filed within a period of six years of the date of loss. There are times when exceptions are made, especially when the loss was not known but these exceptions are very difficult to be applied in practice.
Therefore, it is always recommended to get legal advice as soon as possible.
You need the services of an expert who has experience in dealing with professional negligence claims and understands what needs to be done to achieve the desired goal. We have a lot of experience in dealing with such negligence claims and can offer various funding options for your claims.