“Negligence is the rust of the soul, that corrodes through all her best resolves.”
Owen Feltham, British author 1602 – 1668
Types of negligent professionals
When professionals hold themselves out as having expertise in various areas of commercial life we feel entitled to reply upon them as being component to provide the service we have engaged them to provide. While it is unlikely that we would sue a hairdresser or barista if we thought their services fell short of the appropriate standard many types of professionals can cause us significant loss if they get it wrong. Those include:
- Tax advisors
- Bankers/ stockbrokers/ financial advisors
Our commercial litigation lawyers are experienced at suing negligent professionals and can assist you identify what went wrong, who is responsible and advise you about what you should do about it. Both the District and Supreme Courts in NSW have professional negligence lists which have special procedures which don’t apply to other types of cases. “Professional negligence” strictly speaking includes not only the common-law action of negligence, but also may include any or all of the following actions against a professional:
- breach of contract
- misleading and deceptive conduct, including a breach of the Australian Consumer Law (ACL)
- other breaches of the ACL concerning substandard professional services provided, such as breaches of warrantees
- breaches of state legislation
- breaches of fiduciary duty
Insurance and time limitations
Almost all professionals carry insurance which may respond (apply) in your situation. Not all insurance policies will respond to all situations, for example many insurance policies won’t cover fraud, deliberate dishonesty, defamation or loss (destruction?) of files/ documents by a professional. What effect non coverage by an insurance policy may have on your claim depends on the likely size of your recovery and the net asset position of the professional involved.
If you don’t commence court proceedings within a time limitation you may be prevented from ever doing so. In some cases there is no ability to extend a time deadline, once missed, but in a specific range of circumstances a time extension may be possible, if you proceed quickly.
The CharterLaw advantage in professional negligence
We have particular expertise because of the fact that several of our directors have dual legal and accounting qualifications and due to our associated accounting practice CharterLaw Accountants. Unlike many lawyers who practice in this area, we have people “on-site” able to do the forensic accounting legwork to properly understand where financial, taxation and accounting advisors have given you incorrect or poor advice. This can mean real savings for you in terms of engaging a financial or taxation professional in order to provide expert evidence for use in court as there is no need to engage a second expert witness (or so-called called “dirty expert”) in order to understand how to properly instruct the first expert witness or to explain their findings to you. See our separate page about suing accounting, financial and/or taxation advisers for further information about this.
What if I’ve run out of money due to a negligent professional?
This is an area of the law where litigation funding is likely to be an option for you due to the prevalence of professional indemnity insurance. Talk to one of our lawyers if you are considering funding as we may be able to assist you obtain litigation funding that is suitable to your situation.
I’m a professional seeking to avoid liability. What can I do?
We act in claims for and against professional advisors and have particular expertise in tax, accounting and financial matters. Some tips for professionals:
- Read and understand your professional indemnity insurance policy. You need to have coverage appropriate for your practice and after you’ve been sued in a poor time to discover that your insurance is unsuitable
- Maintain competence and keep up with changes in your profession. Just because it’s been that way for many years doesn’t mean that it still is. Things are changing at a rapidly increasing pace in Australian commercial life. Get into the habit of checking
- Remain focussed on each and every client or task. Taking on too much work, straying from your area of expertise (eg an accountant drafting contracts) or leaving insufficient time for a task is a recipe for disaster