Professional negligence arises when the clients of the professionals have suffered financial loss as a result of poor or unsatisfactory service provided by the professionals. Professionals such as medical/legal practitioners, accountants, financial consultants, and real estate agents etc. They all have a legal duty to do their jobs to a minimum standard of competence.

Although each professional has their standard of service, there is a universal standard of all: “The professional acted in a way that was widely accepted by peer professional opinion”.

There are requirements for the professional negligence claim, and common causes of the professional negligence claim could be:

  1. Misleading professional advice;
  2. Negligent treatment by a medical practitioner;
  3. Engineering mistake;
  4. Misrepresentations by real estate agents; and
  5. Incorrect property evaluation.

 

Requirements for the professional negligence claim

A person who wishes to bring the professional negligence claim must:

  1. Establish that there was a duty of care owed to him/her by the professional;
  2. Show that the professional breached the duty of care or professional standards established by relevant authorities (For example, Code of Ethics for Professional Accountants issued by CPA Australia); and
  3. Have suffered losses, an injury or damage due to the breach or negligence done by the professionals.

The court also considers other factors other than the above: the attitude of professionals when providing their service, the proximity between the person and the professional and the client’s conducts.

 

Examples of a situation when the professional negligence arises

Financial consultant

  1. The recommendation is not in the best interests of the clients;
  2. The recommended financial products are too risky for the clients;

Accountants

  1. Failed to lodge business activity statements and tax returns;
  2. Financial statements or documents with significant errors;
  3. Incorrect financial analysis of business;

 

You MUST have suffered the actual loss to claim the compensation against the professional. Without actual loss suffered, you cannot claim the compensation against the professional even though the advice or service provided was negligent. Each state has different legislation on professional negligence. Therefore, it is vital to understand the correct law before you make a move.

Time limitation

There is a limited period to make a claim on professional negligence, however the period is varied depending on each state statutory legislation. Generally speaking, the limitation period is between 3 to 6 years.  The time limit starts to count when the damage is suffered as a result of the breach of duty by the professional.

 

So if you put your trust in a professional and they have let you down, you might be able to claim compensation for the loss you suffer of their negligence.

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