Commercial Law
Professional Negligence Claims for Businesses
Claims by companies against accountants, auditors, tax advisers, surveyors, valuers and insurance brokers whose advice cost the business money.
Takes about 2 minutes. No obligation.
Barristers regulated by the Bar Standards Board
Businesses rely on outside advisers for decisions that can be worth far more than the fee paid for the advice: an accountant structuring a sale, a tax adviser recommending a scheme, a valuer reporting on property offered as security, or a broker arranging cover that turns out not to respond to a claim. When that advice falls below a competent standard and the business loses money as a result, a professional negligence claim may allow it to recover that loss, usually from the adviser's professional indemnity insurers.
The claimant must prove four things. The adviser owed the business a duty of care, usually set by the engagement letter and the parallel duty in tort. The adviser breached it by falling below the standard of a reasonably competent member of that profession, which is normally established through independent expert evidence. The breach caused the loss. And the loss falls within the scope of the duty the adviser assumed, a question the Supreme Court has emphasised in recent cases about the purpose of the advice given. Contributory negligence by the business, for example ignoring warnings, can reduce damages.
Before issuing, parties are expected to follow the Pre-Action Protocol for Professional Negligence. The claimant sends a detailed Letter of Claim, the professional should acknowledge it within 21 days, and then has three months from the acknowledgement to investigate and send a Letter of Response. Claims against architects, engineers and quantity surveyors follow the construction protocol instead. Because time limits run while all this happens, standstill agreements are common.
Limitation is often the decisive issue. A claim in contract runs six years from breach; a claim in negligence runs six years from when damage was suffered, with an extra three years from the date the business knew or ought to have known the relevant facts, subject to a fifteen year longstop. A Direct Access Barrister can review the file, test liability and loss with you, draft the protocol letters and pleadings, and instruct and challenge experts within proceedings. The company handles service, filing and disclosure. Very large claims with substantial disclosure may need a Solicitor too, and your Barrister will say so.
What Commercial Professional Negligence Barristers Do
Claims Against Business Advisers
Common defendants include:
- Accountants preparing accounts or advising on transactions
- Auditors who failed to detect fraud or misstatement
- Tax advisers recommending schemes or missing reliefs
- Surveyors and valuers of commercial property
- Insurance brokers who placed inadequate cover
- Corporate finance and other business advisers
Liability and Loss Advice
Your Barrister can assess:
- Terms of the engagement letter and any liability cap
- Whether the adviser owed a duty to the company or its owners
- What independent expert evidence is needed on breach
- Whether the loss falls within the scope of the duty
- Contributory negligence and the effect of warnings given
- Limitation and whether a standstill is needed now
Protocol Letters and Proceedings
Your Barrister can draft:
- Letters of Claim under the professional negligence protocol
- Standstill agreements to protect limitation
- Replies to the Letter of Response
- Particulars of claim and replies to defences
- Questions to and instructions for experts
- Skeleton arguments and submissions at mediation
Your Barrister drafts these documents. The company sends them, files them and serves them as required.
What the Business Provides
With Direct Access you:
- The engagement letter and fee invoices
- The advice, reports or accounts complained of
- Board minutes showing how the advice was relied on
- Financial evidence of the loss suffered
- Correspondence with the adviser after the problem emerged
- Details of any complaint made to the adviser's regulator
How Direct Access Works
- 1
Limitation Check
Before anything else, your Barrister works out when the cause of action arose in contract and in tort, whether the later knowledge date may help, and whether a standstill agreement should be proposed immediately.
- 2
Merits Review
The engagement terms, the advice and the business's reliance on it are analysed, and a view is formed on duty, breach, causation, scope of duty and the recoverable loss, including any cap in the engagement letter.
- 3
Expert Input
Where breach depends on professional practice, a preliminary view from an independent expert in the same discipline is often obtained before the Letter of Claim, so allegations are supportable.
- 4
Protocol Stage
The Letter of Claim is sent. The adviser should acknowledge within 21 days and respond within three months, usually after notifying its professional indemnity insurers. Your Barrister analyses the response and any offer.
- 5
Negotiation or Proceedings
Many claims settle at this point, often at mediation. If not, your Barrister drafts the claim, and the court sets directions for disclosure, witness evidence and expert reports in each relevant discipline.
- 6
Trial
At trial your Barrister cross-examines the adviser and the opposing experts, and argues breach, causation, scope of duty and the measure of loss.
Does your case qualify for Direct Access?
Tell us about your matter and we'll confirm whether you can instruct a Barrister directly, then match you with the right specialist.
Prefer to talk? Call 0800 302 9921. Lines open 8am to 8pm, same-day callback.
Frequently Asked Questions
Our accountant made a mistake. Do we automatically have a claim?
No. A professional is not negligent simply because the advice turned out badly. You need to show the advice fell below what a reasonably competent accountant would have done at the time, that the mistake caused your loss, and that the loss is the kind the accountant's duty was meant to protect against.
Can shareholders sue the company's auditors?
Usually not. The statutory audit is generally owed to the company as a body, to help shareholders exercise control, not to protect individual investment decisions. Third parties such as lenders or buyers can only claim where the auditor assumed responsibility to them for a particular purpose. The company itself may have a claim if, for example, a missed fraud allowed further losses.
How long do we have to claim against a professional adviser?
In contract, six years from the breach. In negligence, six years from when the business suffered damage, or three years from when it knew or reasonably could have known the key facts if later, with a fifteen year longstop under the Limitation Act 1980. These rules are technical, so take advice as soon as you suspect a problem.
Does the professional negligence protocol apply to surveyors?
It applies to surveyors and valuers advising on commercial property. Claims against architects, engineers and quantity surveyors follow the Pre-Action Protocol for Construction and Engineering Disputes instead, which has different steps.
Will we need an expert witness?
In most cases, yes. Whether an accountant, valuer or broker met the required standard is usually proved by an independent expert from the same profession, whose overriding duty is to the court. Loss may need a separate forensic accountant. The court controls expert evidence, so permission is needed to rely on it at trial.
Will a complaint to the adviser's regulator get our money back?
Professional bodies such as the ICAEW or RICS deal with conduct and discipline, not compensation for business losses. Some small businesses may be able to complain to the Financial Ombudsman Service about regulated financial firms. For most commercial losses, a civil claim is the route to damages.
Can a business bring this claim through Direct Access?
Often, yes, particularly where the issues are focused and the documents manageable. Your Barrister advises, drafts and appears, and the company deals with filing, service and disclosure. Fixed fees, agreed up front. Advice starts from £250 and court representation from £850, with a clear quote before any work begins.
Check Your Claim Before Time Runs Out
Speak to a Barrister about liability, loss and limitation in a claim against your business's advisers.
Or call us: 0800 302 9921. Lines open 8am to 8pm, same-day callback.