Financial Services Negligence
If you have been let down by an accountant or financial advisor, our expert professional negligence lawyers can help you to claim compensation for any financial losses.
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We can offer support and advice if you have been let down by a financial advisor.
When you ask an accountant, financial advisor or insurance broker to look after your financial affairs you expect to rely on their advice and expertise and if they let you down it can have devastating consequences.
If you have lost money because of mistakes or poor advice, you may be able to claim compensation for professional negligence.
Common examples of negligence by accountants and financial advisors include:
- Missing deadlines for returns
- Incorrect tax advice, including in relation to Employee Benefit Trusts (EBTs)
- Mistakes in preparing accounts or auditing errors
- Incorrectly valuing a company, business or assets
- Incorrect advice on pensions, annuity policies and Self Invested Pension Plans (SIPPS)
- Inappropriate investment advice, including in relation to stocks, shares, bonds, ISAs, Interest Rate Swaps and Unregulated Collective Investment Schemes (UCIS)
- Failing to advise properly on investments and risks
- Failure to disclose commission or an interest in financial products
- Not disclosing material facts to an insurer
- Not following instructions
- Giving incorrect advice
- Not acting in your best interests
In most cases, accountants, financial advisors and insurance brokers will have professional indemnity insurance to cover such claims.
Negligence is more than just poor service. To bring a claim for professional negligence against your accountant, financial advisor or insurance broker, you will need to prove that their advice or actions fell below the standard you should reasonably expect and that this has caused you to suffer a financial loss. This can be difficult and require the assistance of an expert solicitor.
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FAQs
What is professional negligence?
Professional negligence is where a professional fails to perform his responsibilities to the required standard. This if often where a professional advisor, such as a solicitor, accountant or surveyor, gives incorrect or incomplete advice or fails to act, for instance by missing a deadline.
Who can a claim be brought against?
A claim for professional negligence can brought against any professional advisor but most the most common are claims against solicitors, barristers, conveyancers, surveyors, valuers, architects, builders, accountants, engineers, financial advisors, insurance brokers, will writers and local authorities.
In many cases, professional advisors will have professional indemnity insurance to cover such claims, even if they are no longer trading (known as “run off cover”).
Do we have a claim for professional negligence?
Negligence is more than just poor service by a professional advisor. In order for a claim to succeed it is necessary to show that the professional owed a duty of care, that they breached that duty and that this caused a loss. A professional advisor will usually owe their client a duty of care. The standard required of a professional is not one of perfection and the mere fact of an error does not necessarily constitute negligence. A professional will only breach their duty of care by making an error which no reasonable member of their profession, in their circumstances, would have made. Even then, a professional may have acted negligently, but a claim will only succeed if their actions or advice caused the
loss suffered by the business.
For issues of poor service, most professional advisors will have their own complaints procedure or a complaint can be referred to a professional or trade body, such as the Legal Ombudsman for solicitors or barristers, the ICAEW for accountants or the Royal Institute of Chartered Surveyors (RICS) for surveyors.
What can I do about poor service by a Professional Advisor?
Most professional advisors will have their own complaints procedure or a complaint can be referred to a professional or trade body, such as the Legal Ombudsman for solicitors or barristers, the ICAEW for accountants or the Royal Institute of Chartered Surveyors (RICS) for surveyors.
How is my claim assessed?
We will start by taking your detailed instructions about the case, usually either by meeting with you or by phone. We will also talk to you about funding options and agree how the claim (or at least the first stages of work) will be funded. It will often then be necessary for us to obtain and review any files or other relevant documents held by your professional advisor. It may also be necessary for us to obtain evidence from an expert (such as an accountant, surveyor or a medical expert) to assess the value of your claim. We will then be in a position to advise you on the merits of your claim and to agree a case plan.
Will I have to pay anything/what will it cost?
We will talk to you about costs at the outset and carry out a full risk assessment. In appropriate cases, professional negligence claims can be funded by a Conditional Fee Agreement (CFA) (also known as a “no win, no fee” agreement). What this means is that you do not pay anything to us unless your claim is successful. If your claim is successful, most (but not all) of our costs are usually recoverable from the other side. Any shortfall and our “success fee” (an agreed percentage uplift) are deducted from your damages (up to an agreed cap). You can also take out after-the-event” or “ATE” legal expenses insurance against the risk of having to pay costs to the other side (and your own expenses) if your claim is unsuccessful and disbursement funding for expenses such as court fees and expert’s fees. Other flexible funding options are also available.
How much can I claim?
Damages can be claimed as compensation for any loss resulting from the negligent actions or advice. Damages for professional negligence are intended to put you in the position you would have been but for the negligence. This is found by comparing what your position would have been if there had been no negligence and your actual position.
This can include any financial loss (including lost profit or additional costs), a reduction in value of property or other assets and, in some cases, damages for physical or psychological harm.
How long will my claim take?
It depends, but our aim is to settle your claim as soon as possible. In most cases the professional advisor (or their insurer) will have up to 3 months to consider, investigate and respond to a Letter of Claim, so some claims are settled within or shortly after this period. If the claim cannot be settled and is contested to trial, this could take 12-18 months or longer in exceptional cases.
Will I need to attend court?
Most claims are settled without the need for court proceedings to be issued and, of those that are not, the vast majority are settled before trial. But if a claim cannot be settled and is contested to trial, it is expected that you (as the claimant and a key witness) will attend court and give evidence at trial.
Are there any time limits?
Yes, in most cases a claim must be brought within 6 years from the date of the negligence. However, in cases where the negligence only becomes apparent at a later stage, this may be extended to 3 years from the date of knowledge of the facts which might give rise to the claim. There is a long-stop date of 15 years. After these limitation periods expire any claim will be statute barred and cannot be pursued.
It is therefore important to seek legal advice quickly if you think you may have a claim for professional negligence.
