What are the four elements of a professional negligence claim?

Professional negligence occurs when a professional fails to provide a service to the required standard, breaching their duty of care and causing their client financial loss. Examples include a solicitor failing to advise on a potential claim or a surveyor overvaluing a property.

Elements of a professional negligence claim

To bring a successful claim, the claimant must satisfy four elements:

1. Did the professional owe a duty of care?
2. Was there a breach of duty?
3. Did the breach cause loss?
4. Is the loss recoverable?

1. Did the professional owe a duty of care?

There’s no single test for determining whether a professional owes a duty of care. Case law has developed several tests which the courts consider:

• The test in Henderson v Merrett Syndicates Ltd, which asks whether the professional assumed responsibility to provide a service with reasonable care and skill
• The incremental approach, which considers whether analogous cases have already established a duty (Murphy v Brentwood District Council)
• The three-fold test in Caparo Industries v Dickman, which asks whether the damage was foreseeable, whether there was sufficient proximity between the parties and whether it’s fair, just and reasonable to impose a duty.

In most professional relationships, the duty arises from a retainer or contract and is relatively straightforward to establish, meaning these tests are not always necessary.

2. Was there a breach of duty?

To establish a breach of duty, the courts consider whether the professional’s conduct fell below the standard expected of a reasonably competent person in that discipline.

For example, a reasonably competent accountant conducting an audit should be able to identify anomalies in a client’s ledger and investigate further; an accountant falling below this standard might fail to detect the misappropriation of funds.

3. Did the breach cause loss?

Once a duty and breach have been established, the courts must consider whether the breach caused the claimant’s loss. This is determined using the ‘but for’ test: but for the defendant’s negligence, would the claimant have suffered the loss?

If the loss would have occurred in any event, or resulted from something other than the professional’s negligence, causation will not be proved and the claim will fail.

4. Is the loss recoverable?

The final element is whether the claimant’s loss is recoverable, which is broken down into three parts.

First, the loss must fall within the scope of the professional’s duty of care. A professional is only liable for losses they were supposed to protect the claimant from, rather than all consequences of their conduct.

Second, the general rule is that pure economic loss is unrecoverable, save in exceptional cases. Pure economic loss is financial damage resulting from negligence that is not accompanied by any physical damage to the claimant’s own person or property.

Third, the loss must have been foreseeable. In contract claims, the courts consider whether the loss was a natural and probable result of the breach and within the contemplation of the parties at the time the contract was made. In tort claims, the courts apply an objective test of what a reasonable person would have foreseen at the time of the breach. It’s the type of loss that must be contemplated, not the extent.

Conclusion

It’s important to seek legal advice at an early stage to determine whether the above four elements can be established and a professional negligence claim pursued.