Professional negligence solicitors do not deal with complaints about poor service, bad attitudes or inadequate procedures. They deal with claims involving financial loss that has been or is likely to be sustained. If you have a complaint against an accountant, you should contact the relevant professional body who may be able to assist you however they are not able to offer compensation for which you must take advice from a professional negligence solicitor.
Independent financial advisors, consultants or agents effectively hold themselves out as experts in the same way as professionally qualified people such as lawyers and doctors and they can therefore be held to account and sued in a court of law in the event of professional negligence by failing to offer sound financial advice. The ordinary rules of negligence apply and in order to succeed in a compensation claim against an independent financial advisor, consultant or agent it is necessary to prove the following :-
Duty of Care - It must be shown that the independent financial advisor, consultant or agent owes the client a duty of care which is usually established by proving the existence of an advisor/client relationship which may be evidenced contractually in writing by way of a business agreement or acceptance of agreed terms and conditions or merely verbal by the advisor agreeing to work for the client.
Breach of the Duty of Care - The advisor must apply reasonable skill and care in the advice that they give to the client and failure to do so may amount to negligence if no other similarly qualified advisor would have given the same advice. The advisor does not have to be exceptional but must be reasonably competent and diligent when compared to others in the same field. The advisor should make detailed enquiries about the client and their attitude to risk before advising any particular investment as failure to do so may amount to negligence. The mere fact that an investment losses value is not necessarily indicative of negligence.
Causation - Obvious as it may sound it is necessary to show that the negligent advice was heeded by the client and followed by the client thereby causing direct financial loss. If the client would have taken a similar direction with or without the advice then it may not be possible to show causation. Losses that are totally unpredictable may be deemed to be too 'remote' to claim.
A professional negligence claim against an accountant is similar to all other profession negligence claims in so far as it is necessary to show that the negligent accountant has failed to exercise a reasonable degree of skill and car when compared to other accountants carrying out the same or similar work. The requirements on negligence are that the accountant must owe the client a duty of care which exists by virtue of the accountant agreeing to carry out work on behalf of the client, that duty must have been breached by the accountant failing to carry out the work with a reasonable degree of skill and care and the breach must have caused a direct financial loss.
Almost all cases of professional negligence require a team of experts working towards the goal of proving that a negligent accountant failed to exercise reasonable skill and care. Some compensation claims for substantial financial awards as a result of accountants negligence may require evidence to be provided by an independent forensic accountant in order to prove liability.
Professional negligence solicitors represent clients who have been the victim of inadequate professional services that have been carried out negligently thereby causing financial losses. Most professional bodies require their membership to take out indemnity insurance to cover them against professional negligence and some professional bodies also pay losses from a compensation fund in the event of dishonesty. The Law Society which controls solicitors along with the Solicitors Regulation Authority which disciplines solicitors requires all solicitors to be insured against professional negligence and operates a compensation fund to which all practicing solicitors contribute every year which is used to pay out losses sustained by clients of dishonest solicitors.
For a successful professional negligence claim against a solicitor it is necessary to prove that there was a duty of care that existed between the solicitor and the client. A duty of care will exist in almost all cases where someone has held themselves out as a professional advisor and has accepted instructions from a potential client. The professional negligence solicitor must be able to show that the mistake made by the negligent solicitor was one which no competent solicitor would have made. This is determined by comparison with work carried out by other solicitors in a similar situation. Finally, it must be shown that the breach of the duty of care lead directly to financial loss.
Professional negligence solicitors deal with a wide range of issues, one of the most serious of which involves negligent financial advisors, agents or consultants with losses frequently affecting lifestyle, retirement plans and family income. The fact that the value of an investment goes down does not necessarily mean that a financial advisor has been negligent however they are expected to give advice to their clients with a reasonable degree of skill and care and must stay within statutory guidelines. Financial advisors and investment or mortgage brokers are regulated which means that an Independent Financial Advisor (IFA) or a financial consultant or broker is require to be authorised and hold what is effectively a licence before they are allowed to give financial advice to members of the public and in addition they must follow the code of practice dictated by law. In regard to negligence the most common error by a professional financial advisor relates to a failure to obtain sufficient personal details including taking note of the investors attitude to risk before advising on an unsuitable investment.
The ordinary rules of negligence apply in regards to financial consultants, advisors, agents, or brokers and it is necessary to show that the negligent financial consultant owed a duty of care to the client which is established once the financial consultant agrees to advise and/or represent the client, thereafter it must be shown that the duty has been breached by the financial consultant failing to exercise a reasonable degree of skill and care when compared to others in the same field and finally it must be proved that the losses sustained are as a direct result of the client acting on the erroneous advice.
There are numerous ways in which a financial advisor, agent, consultant or broker can be held to account and be required to pay compensation. The list below contains just some of the potential reasons for making a compensation claim against a financial advisor based on negligence if an investment loses value or fails to achieve expectations or returns: -
Most policies of insurance are dealt with by an insurance broker who is an intermediary between the insured and the insurance company. Historically the job of an Insurance broker was to act as the agent of the insured to obtain the best possible quotation after researching all of the available policies, but an insurance broker may also be the agent of the insurance company. The lines are blurred however the bottom line is that the insurance broker owes the insured client a duty of care and can be sued for financial losses in the event of negligence. [There are some clients who go direct and some insurance companies that will not take business through brokers.]
To succeed in a claim of professional negligence against an insurance broker it is necessary to show that the insurance broker owed the insured a duty of care which is proven by the agreement between them, thereafter it must be shown that the insurance broker has breached the duty by failing to act with skill and care, when compared to other reasonably skilled brokers, which has in due course caused direct losses to the insured.
There are several common errors that a negligent insurance broker can make that may result in a professional negligence compensation claim. The most obvious is the failure to renew annual cover upon expiry however there are also more subtle errors such as under value or over value of insured assets.
There is also the question of miss-selling where an insurance broker deliberately or negligently sells a client a policy that is not suitable or sells a policy merely to claim the commission that may be available. In addition, there is the practice known as 'churning' where a broker will recommend a change of policy in the knowledge that the client will lose money but the insurance broker will collect a commission.
An estate agent has to get it right or there may be a claim for compensation for professional negligence. If an estate agent puts a domestic or commercial land or property on the books too cheap or too expensive, there may be a financial loss to the seller. UK professional negligence solicitors deal with compensation claims against estate agents, valuers and letting agents for both domestic and commercial, land and property. They usually offer free initial advice with no further obligation.
If an estate agent views a property and advises on value which is below market expectations and reliant on that advice a seller then offers the property for sale, there is an opportunity for the seller to sue the negligent estate agent for financial loss if the sale price ultimately achieved is below market value.
If a negligent estate agent over values a property which is then offered for sale it may well be that there would have been prospective buyers who are lost because the price is above market value. In addition, if the seller is bearing the cost of advertising it may be a waste of advertising costs if the property does not sell because of overvalue. Furthermore, if the seller is paying interest on a loan secured on the property, the over value may result in losses of interest on capital.
An estate agent must be aware of changing market conditions and if appropriate should give further advice to sellers if the market has improved or declined in order that the seller may consider an appropriate alteration in price.
If an estate agent also acts as a letting agent then overvalue or undervalue of rent, may result in losses to a lessor for the same reasons as outlined above. Letting agents often do not appreciate the risk they are taking to affect a quick lease of substantial commercial property where the lease may run for 30 years with annual losses being multiplied year on year.
The vast majority of solicitors and other professional people are honest and work completely in accordance with their clients instructions however there are dishonest professionals who do not tell the truth, who steal money, submit fraudulent documentation and who lie to the court for financial advantage. Its not just solicitors who are dishonest, but it extends to surveyors, valuers, bankers, accountants, estate agents, financial advisors, building society managers and all manner of professional people. There are many ways that dishonest professional people operate but the result is to gain access to funds and eventually steal assets.
One of the most common forms of dishonesty in the professions which necessarily involves a dishonest solicitor and several other dishonest professionals relates to mortgage fraud. This offence would not be possible without the collusion of several different disciplines and typically mortgage fraud involves a solicitor, an estate agent and a valuer together with one or other means of finance which can include a banker or an independent financial advisor or a building society manager.
The typical modus operandi for mortgage fraud is for an estate agent to find a property, for a valuer to enhance its value and a solicitor to carry out the conveyancing after having financed the loan for an over value perhaps with the collusion of a banker or independent financial advisor or building society manager. The property is then purchased in a false name however the mortgage loan is based on the enhanced value of the property. The gang pockets the difference and abandons the property. When the property is eventually sold after the lender forecloses on the loan there will not be enough from the sale proceeds to discharge the mortgage.
An alternative mortgage fraud involves selling a property that is vastly over valued to an unsuspecting purchaser who innocently relies on an enhanced professional valuation when applying for a mortgage. The gang split the resulting profit and the defrauded purchaser is well into negative equity when an accurate valuation is carried out later. This type of mortgage fraud may go undetected in times of raging inflation as the inflationary increase in value takes care of the overvalue and any potential negative equity.
Our financial solicitors call on the services of independent actuaries, barristers, financial advisers and insurance experts who work together as a specialist team when necessary to settle compensation claims for mis-sold investment bonds. If the claim is unsuccessful for any reason they will make no charge whatsoever. You will not be asked to fund or finance your application in any respect. Our clients never pay any charges unless the claim is settled successfully. If you would like to speak to a specialist solicitor just complete the contact form or call the helpline or email our offices and one of our experts will discuss your potential claim without any further obligation.SOLICITORS HELPLINE: ☎ 0330 660 7004