Claims Against A Professional Adviser
Most professional advisers – such as accountants, valuers and solicitors – provide a professional and competent service. Usually, their clients are happy with the work carried out for them.
But sometimes things go wrong. Whether it was your business which engaged the adviser or you personally, if a financial loss has been suffered, you may be able to make a claim against them. For more information, download our free guide.
Was It Negligence – Or Just Poor Service?
It is important to distinguish between actions by your adviser which have caused you a financial loss, and poor service which does not actually cause a loss. Poor service might include delays, a failure to communicate or answer your calls and correspondence.
While poor service is annoying and frustrating, it does not give you a claim for damages against the adviser. To be able to do that you must have suffered a loss due to the negligence (carelessness) of the adviser.
What Can Give Rise To A Claim?
If you employed an adviser and their actions – or failure to act – cause you a financial loss, you may be able to make a claim to recover the loss. These are some typical scenarios:
Accountant – Failing to submit tax returns or accounts on time resulting in fines or interest payments
Insurance broker – Obtaining insurance for you that is not in fact required, resulting in unnecessary payment of premiums; failing to place insurance, meaning that you are not insured when a loss occurs (such as a Public Liability claim, or property damage)
Solicitor – Failing to check title documents on a conveyance, resulting in your not owning all of the property you thought you were buying; failing to issue court proceedings in time, so that a limitation period expires and the claim is lost
Architect – Poor design or badly-drawn plans, requiring you to pay for them to be done again; inadequate project management, resulting in cost over-runs or spiralling budgets
Financial adviser – Negligent advice on tax or investments, pension and estate planning, resulting in financial loss; recommendations to use inadequate or inappropriate materials, causing you to incur costs unnecessary
Barrister – Advising you to settle a claim for damages at significantly less than you could have received, so that you receive less in damages than you should have done
Surveyor/Valuer – Under-estimating the costs of a project; over-valuing a property before you buy it, resulting in your owning property worth less than you paid for it; failing to report defects in a property before you buy it
First, Make A Complaint
Before making a formal claim, follow up your adviser’s own complaints procedure. This should be set out in your retainer letter or other correspondence from the adviser. If not, the procedure may be on their website. If it is not there either, ask the adviser directly (or the senior partner of the firm).
You or your solicitor should write to them (or follow up a telephone call in writing) so you have a written record of what you say. The adviser should respond within a short period (8 weeks maximum). The complaints procedure may involve asking an independent person or body to arbitrate the dispute.
You can also contact the adviser’s professional body.
How To Make A Claim
If your complaint has not been resolved by the adviser (or their professional body), your next step may be to bring a claim against the adviser for damages. This may also be the case if your complaint has been investigated by the FOS (Financial Ombudsman Service) and you are not happy with the outcome, and do not want to accept it. Your solicitor would send a formal letter of claim seeking damages/compensation on your behalf.
Ultimately, it may be necessary to issue court proceedings to recover damages.
A very important point to note is the time limit for bringing court proceedings. If proceedings are not issued in time, the claim will likely be lost, i.e. you will not be able to pursue it. The main time limit is that a claim must be brought within 6 years of a breach of contract or of loss caused by negligence.
For example, your financial adviser informed you 5½ years ago of a tax planning scheme and advised you to participate in it. The HMRC has recently levied a fine on you because of your participation in the scheme. If your financial adviser was in breach of contract by giving you the advice, you may have only 6 months within which to issue proceedings.
It is important to take advice about a particular set of circumstances. Call us today to discuss your situation and how we can help.
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