In all professional negligence claims the Civil Procedural Rules provide that before commencing a claim, certain procedural steps must be followed (depending on which type of professional you intend to sue).
What follows is a step-by-step guide for a claimant on how to start a professional negligence claim. If the steps are not followed, a court is likely to criticise the defaulting party and there could be potential adverse costs consequences.
If you have suffered financial loss at the hands of a professional who has failed to act to the requisite professional standards, we can assist you. Our professional negligence team have assisted many high net worth individuals and SME businesses obtain compensation from negligent professional advisers such as Accountants, Architects, Builders, Construction and other Engineers, Financial Advisers, Lawyers, Surveyors, Tax Advisers and Valuers.
Our London Solicitors and Barristers are experts in dealing with high value contentious professional negligence disputes. We provide results-focused legal representation to aid those who have been victim to incorrect advice or conduct and can often act on a no win no fee basis after an initial assessment. Our experience and advice will help you decide on the ideal legal strategy to obtain optimal financial redress.
What is the Pre-Action Protocol for Professional Negligence
Any party to litigation or any party contemplating litigation has to follow the Civil Procedure Rules 1998 (the CPR). As a result, the provisions of the CPR are applicable, in particular the Pre-Action Protocol for Professional Negligence (professional negligence PAP).
The new pre action protocol for professional negligence came into effect in May 2018, on which date claims to be issued from then must comply with.
The parties to litigation are encouraged to try to settle any claim without issuing formal proceedings in court. The PAP sets out the framework to be followed and encourages an exchange of information and a set timetable, which both parties must comply with to encourage early settlement without the need for a costly court process.
When does the professional negligence PAP apply?
The professional negligence pre action protocol applies to all claims against legal professionals, accountants, financial advisers, auditors and certain other professionals. But the PAP does not apply to claims against construction professionals, (e.g. architects, engineers and quantity surveyors) as the Pre-action Protocol for Construction and Engineering Disputes is applicable instead. It also does not apply against healthcare professionals (see the PAP for the Resolution of Clinical Disputes) or in defamation cases (see the PAP for Defamation Claims).
First step: The Preliminary Notice
A claimant is required to notify all potential defendant(s) in writing as soon as it decides that there is a reasonable chance of a claim for negligence by submitting a preliminary notice which is required to:
- identify the claimant and any other parties;
- contain a brief outline of the prospective claim;
- provide a general quantification of the financial value of the claim;
- request that the professional inform their professional indemnity insurers (if any, NB law firms are most likely to have professional indemnity insurance).
The defendant is required to acknowledge receipt of the letter within 21 days of receiving it. If the defendant fails to do so once the preliminary notice (or Letter of Claim) is received then this may invalidate their insurance policy.
Second Step: Letter of Claim
When a claimant has decided that there are grounds for a professional negligence claim, then it should send a Letter of Claim to the professional which amounts to a notice of intention to commence legal proceedings. It is recommended that the assistance of specialist professional negligence lawyers is sought for this correspondence as this is an important letter and if not handled correctly can lead to a reduced chance of obtaining a settlement or reduced prospects at trial especially if the subsequent Particulars of Claim (which is a statement of case) differs from the Letter of Claim in which case the court has the discretion to impose sanctions. The professional negligence pre-action protocol states that the Letter of Claim should include:
- the identities of any parties involved in the dispute, or any related dispute (it is important to identify any and all correct defendants including successor entities before the limitation period expires);
- a chronology containing key dates of the facts on which the claim is based, together with copies of all key documents;
- reasonable requests which the claimant needs to make for documents held by or in control of the professional;
- any details of the allegations made by the claimant against the professional;
- an estimate of the financial loss caused to the claimant by the alleged negligence, including details of how the loss is calculated (in any claim this figure will likely be the subject of expert evidence, for example, consequential losses or loss of chance are difficult to quantify at the outset of a claim without expert evidence therefore an estimate will suffice at this stage, for example “in excess of £2 million”);
- confirmation of whether or not an expert has been appointed (expert evidence is an important part of any claim in litigation and as experienced professional negligence lawyers we have forged many contacts with leading experts in different industries from forensic accounts to hedging derivatives experts);
- a request that a copy of the Letter of Claim be forwarded on receipt to the professional’s indemnity insurers (if they have any);
- an indication of whether you agree to refer the dispute to adjudication. If so, propose three adjudicators or seek a nomination. If you don’t wish to refer the dispute to adjudication, you should give reasons.
Third Step: Letter of Acknowledgment
Acknowledgment to the letter of claim is required by the professional within 21 days. If the defendant does not do so, the court has the discretion to levy sanctions.
Fourth Step: Investigations by the defendant
After 90 days from the date of the Letter of Acknowledgment, the professional should investigate the claim and respond to the claimant by providing a Letter of Response and if it so wishes a Letter of Settlement.
Fifth Step: Response to the Letter of Claim
Once a defendant has completed the investigation (i.e. within 90 days of the Letter of Acknowledgment, unless an extension of time has been agreed), a Letter of Response, a Letter of Settlement, or both will be sent by the professional’s legal team.
Sixth Step (1): Letter of Response
This is letter is sent in open communication responding to the claimant’s allegations. Whilst it does not have the formal status of a pleaded Defence (which is a statement of case), the court has the discretion to impose any sanctions if it is materially different from the Defence in any court proceedings.
In a case with good prospects which was well set out in a Letter of Claim, the Letter of Response or a separate Letter of Settlement may offer the possibility of alternative dispute resolution (ADR) such as mediation or a without prejudice meeting. This could lead to resolution of the dispute. If not then you will need to take advice as to whether to reply further or to issue a Claim Form at court (the latter of which can be an important tool in focusing the parties on the resolution of the claim especially in circumstances where the professional is not taking meritorious allegations against it seriously).
Sixth Step (2): Letter of Settlement
According to the professional negligence pre-action protocol (PAP) (particularly at para 9.3.1), a Letter of Settlement can be sent in various forms, including: a letter sent in open communication; a without prejudice letter (which means the contents of which cannot be later admitted as evidence in the court case where the claim does not settle); a “without prejudice save as to costs “(WPSATC”)” letter; or an offer made pursuant to CPR Part 36, commonly referred to as a “Part 36 offer”.
Seventh Step: Alternative Dispute Resolution (“ADR”)
Ultimately, many professionals and defendant companies and firms will not want a long court case with bad publicity and negative judicial public chastisement of poor conduct, therefore ADR is ordinarily considered at every stage of the claim/defence to the claim.
The court has a wide ambit to levy sanctions upon parties for costs if they are found to have behaved unreasonably by refusing to engage in ADR. The court is
There are several forms of ADR, which includes:
The parties to the claim will mutually select a mediator and a venue for the mediation. Mediation often occurs in professional negligence claims and can result in a successful resolution of the dispute, either during the course of the mediation itself or in follow-up negotiations post- mediation.
Our specialist lawyers have attended many mediations (with one in particular lasting over 24 hours straight!) alongside our clients, industry leading experts and the UK’s top QCs to achieve fantastic settlement results.
Arbitration is generally not deployed in professional negligence claims (and certainly does not occur as often as Mediation).
Early Neutral Evaluation
This is a rare form of ADR in the majority of professional negligence claims and is usually only offered by defendants facing a weak claim from an inexperienced litigator or litigant in person.
Adjudication is the binding determination of the claim (unlike for Early Neutral Evaluation which is non-binding), or on particular issues (for example on whether a duty of care is owed in the first place or whether the claimant has failed to mitigate its’ loss(es)) by an independent third party (the Adjudicator). Adjudication offers flexibility in that the parties are able to agree the precise terms of the adjudicator’s reference and whether or not the adjudicators’ decision will be binding.
Adjudication is relatively rare (except for in construction related disputes where Adjudication is more common). However after the completion of the Adjudication Pilot for Professional Negligence Claims supported by the Ministry of Justice, the requirement to consider whether the dispute is suitable for adjudication has been added to the professional negligence PAP in May 2018.
In May 2019, the Professional Negligence Bar Association launched a voluntary adjudication scheme for professional negligence disputes. This allows for disputes to be determined by an Adjudicator who can be either nominated by the Chairman of the PNBA (Caroline Harrison QC) or by the parties. The Adjudication scheme rules can be downloaded here.
Adjudication is generally best suited to low value claims or claims where the facts and legal issues involved are relatively straightforward.
The Legal Ombudsman (“LeO”) and the Financial Ombudsman Service (“FOS”) have their own complaints mechanisms for individuals and small businesses. Both the LeO and the FOS have the ambit to make determinations which will be binding on the professional if accepted by the complainant (the claimant).
However, there are pitfalls in solely relying on Ombudsman schemes as for example, the Legal Ombudsman cannot award compensation of more £50,000 (but can order the refund of legal fees paid by the complainant which could be in excess of £50,000). Moreover, the Financial Ombudsman is not mandated to award compensation in excess of £150,000 plus interest. Further, the FOS for example have strict jurisdictional criteria before considering any complaint (for example turnover of the complainant company, number of employees and also the FOS has its own time limits in which a complaint can be brought).
City of London Specialist Professional Negligence Lawyers
We specialise in professional negligence claims and have years of experience in handling and resolving negligence claims. Our lawyers have market-leading experience of providing bespoke legal advice and bringing complex claims to settlement. As a leading law firm regularly featured in the news and media and with a track record of success, you can be assured your negligence claim will proceed with precision and care.
We ensure that we provide the best possible outcome for our clients by conducting in depth investigation and research into the realistic prospects of a case before advising on the appropriate course of action in order to reduce time and expense. Where appropriate we encourage the use of alternative dispute resolution (such as mediation and without prejudice negotiation) and our negotiation skills are first-class. If required, we are extremely experienced and capable at navigating our clients through the litigation process.
Clients hire us because of our extensive experience in litigation disputes – when necessary, we know when to go to court and we know how to litigate.
Book an Initial Consultation with our Professional Negligence Lawyers
If you have a claim against a professional and want expert legal advice, get in touch so we can assess the legal merit of your case. We can often take on such claims on a no win no fee basis (such as a CFA or DBA) once we have discussed the claim with you and then assessed and advised you on the merits of the proposed professional negligence action.
Our expert legal team of leading Professional Negligence Solicitors & Barristers can provide urgent help, advice or representation to you. Just call our Professional Negligence Lawyers on 02071830529 or email us now.