Professional negligence claims: how they work and the time limits

Who can be sued

Any person who holds themselves out as having a professional skill and is engaged to use it owes a duty to do so competently. Accountants, solicitors, surveyors, valuers, architects, engineers, financial advisers, tax advisers and insurance brokers are all sued for professional negligence, and the claim is brought by the client who engaged them. Occasionally a third party who relied on the work, such as a lender relying on a valuation, can sue as well.

The claim is usually brought against the firm, since the engagement is with the firm and the firm carries the professional indemnity insurance regulated professionals must hold. That is what makes these claims worth bringing: an insurer stands behind the judgment.

The claim normally has two legs: a claim in contract, for breach of the implied term that the work would be done with reasonable care and skill, and a claim in the tort of negligence, for breach of the duty of care the professional owed independently of the contract. The two are pleaded together, and the reason both matter is limitation, which is dealt with below. This guide describes the law of England and Wales.

The duty and the standard of care

The standard is that of the reasonably competent member of the profession concerned, exercising the skill the professional claimed to have. A general practice solicitor is judged against a competent general practice solicitor; a specialist who held themselves out as such is judged against a competent specialist. The question is whether no reasonably competent practitioner would have done what this one did, or would have failed to do what this one failed to do.

Several things follow. A professional who made a judgement call within the range of views a competent practitioner could hold has not been negligent, even if the call turned out badly. A professional who followed a practice accepted as proper by a responsible body of opinion in the profession is usually protected, unless that practice cannot withstand logical analysis. And the standard is judged at the date of the work, on the information then available, without the benefit of knowing how things turned out.

The scope of the duty matters as much as the standard. A professional is responsible for the task they were engaged to do, and an accountant engaged to prepare accounts is not automatically liable for failing to volunteer tax planning advice. The engagement letter defines the scope, and it is the first document to read on both sides. Where the professional saw an obvious risk and said nothing, the duty may extend, and that argument decides many of these cases.

Causation and loss

This is where good claims fail. Proving the mistake is often the easy part; proving it caused a loss, and what the loss was, is the work.

The claimant has to show that, had the professional done the job properly, the outcome would have been different. If a solicitor failed to advise on a clause in a lease, the claimant has to show they would have negotiated it out or walked away, and that either would have been achievable. If an accountant missed a tax election, the claimant has to show the election would have been made and what it would have saved. Where the different outcome depended on what a third party would have done, the court assesses the lost chance and awards a proportion of the loss reflecting how likely it was.

The loss must also be within the scope of the duty. A valuer who overvalues a property is liable for the consequences of the overvaluation. A fall in the market that would have hit an accurate valuation just as hard is outside that duty. The principle is that the professional answers for the consequences of the information being wrong, and the other consequences of the transaction going ahead are the client's own.

The claimant must mitigate. A business that discovers a mistake and does nothing to limit the damage, when it reasonably could, will not recover the part of the loss it could have avoided. And the measure is compensatory: the aim is to put the claimant in the position they would have been in had the advice been competent, and no better.

The pre-action protocol

The Professional Negligence Pre-Action Protocol governs claims against professionals other than construction professionals and healthcare providers, and the court expects both sides to follow it before proceedings are issued.

The first step is a preliminary notice. As soon as the claimant decides there is a reasonable chance of a claim, it writes to the professional identifying the parties, outlining the grievance and giving an indication of the value if possible. The professional should acknowledge it within 21 days and notify its insurers.

The letter of claim follows once the claimant has enough to set out the case. It identifies the parties, gives a chronology with the key dates and documents, sets out the allegations and what the professional should have done instead, explains how the error caused the loss, estimates the loss with supporting documents, requests the relevant documents the professional holds, confirms whether an expert has been appointed, and states whether the claimant is willing to use adjudication.

The professional must acknowledge the letter of claim within 21 days of receipt. It then has three months from the date of its acknowledgment to investigate and send a letter of response, a letter of settlement, or both. The letter of response says which allegations are admitted and which are denied, with reasons, and encloses the documents relied on. Where the professional denies the claim in full and makes no offer, the claimant can issue proceedings. Otherwise the parties are expected to negotiate, and either can issue once six months have passed from the acknowledgment without agreement.

The protocol does not alter the statutory time limits. Where limitation is close, the claimant should ask for a standstill agreement, under which the professional agrees not to take a limitation defence for a defined period while the protocol runs, or issue protective proceedings and ask the court to stay them.

The time limits

The Limitation Act 1980 gives six years in both contract and tort. Section 5 runs six years from the breach of contract, which is the date of the negligent work. Section 2 runs six years from the date the cause of action in tort accrued, which is the date the claimant first suffered damage, and that can be later than the work: a badly drafted document causes no loss until it is relied on.

Section 14A extends the period for negligence claims where the damage was hidden. Where the ordinary six years would have expired, the claimant has three years from the date on which they first had both the knowledge required to bring a claim and the right to bring one. Knowledge means knowing the material facts about the damage, and that it was attributable to the act or omission complained of, and the identity of the defendant. It includes knowledge the claimant could reasonably have been expected to acquire, including with expert help it was reasonable to seek. The three years run from when the claimant knew enough to investigate. Taking advice and being told there is a claim comes later, and the clock has already started by then.

Section 14B sets a longstop. A negligence claim not involving personal injury cannot be brought more than fifteen years after the last act or omission alleged to constitute the negligence, even if the damage has not yet occurred or been discovered. Section 14A does not extend past it.

The combination means the safe date is six years from the work, and the question for anybody discovering an older mistake is what they knew and when. That question should be answered with a solicitor within days of discovery, because the three-year clock in section 14A is often already running.

Adjudication

The protocol asks each side to say whether it is prepared to use adjudication, and to give reasons if it is not. Adjudication in this context is a voluntary scheme under which an independent adjudicator gives a written decision on the claim, or on a defined issue within it, on the documents and within a fixed timetable. It is far quicker and cheaper than a trial, and the parties agree in advance whether the decision is to be binding or is to stand only until a court decides otherwise.

It suits a claim where the facts are largely in the documents and the dispute is about whether the work was competent and what the loss was. It is less useful where the case would turn on witnesses. A party who refuses it without a reason should expect the court to ask why.

Paying for a claim

A professional negligence claim against an insured defendant is one of the few kinds of business litigation where the defendant can always pay a judgment, and the funding market reflects that.

A conditional fee agreement means the solicitor is paid nothing or a reduced fee if the claim fails and full fees plus a success fee if it succeeds. The success fee is paid by the client from the damages and is capped as a percentage of the ordinary fees. A damages-based agreement means the solicitor takes an agreed percentage of the sum recovered. Both are available for claims with a good prospect of success and a clear route to recovery, and neither covers the other side's costs if the claim is lost.

That gap is filled by after the event insurance, a policy taken out once the dispute has arisen that pays the opponent's costs and the claimant's own disbursements if the claim fails. The premium is usually deferred and paid at the end, and is not recoverable from the loser.

A business's existing legal expenses insurance, often bundled with a commercial policy, may also cover a claim against a professional, so read the policy before assuming it does not.

Our own fees for a claim of this kind are agreed in writing before any work starts, and the structure depends on the merits and the size of the loss.

If your business receives a claim

The mirror position is a business that provides professional services and receives a preliminary notice or a letter of claim. The first step is the same for everybody: notify your professional indemnity insurers at once, in the way the policy requires, and before responding to the claimant. Policies are written on a claims-made basis and almost all make prompt notification a condition of cover. An insured who argues with the claimant for three months and then tells the insurer risks being told the claim is not covered.

Do not admit anything. Most policies prohibit admissions of liability without the insurer's consent, and an offer made in an attempt to keep the client can void the cover. Acknowledge receipt, say that insurers have been notified, and say that a substantive response will follow within the protocol period.

Then gather the file. The engagement letter, the terms of business, the advice given and the documents showing what the client was told and when. The scope of the engagement is usually the defence, and a well-drafted engagement letter that limited the retainer to a defined task is worth more at this stage than any argument about the standard of care. Any limitation or cap on liability in the terms should be identified early.

The insurer will usually appoint solicitors, and the letter of response goes out under their direction within the three months. A professional who thinks the claim is bad should say so with reasons and documents, and one who thinks it is good should let the insurer settle it.

The evidence that decides these cases

Professional negligence claims are decided on documents, and the file the professional kept is usually the most important evidence on both sides. A solicitor's attendance notes, an accountant's working papers, a surveyor's site notes and photographs: these show what was done, what was seen and what was said, and their absence is telling.

The claimant's own documents matter just as much: what the client asked for, what they were told, and what they did with the advice. A claimant who says they would have walked away from a deal needs to show that walking away was a real option at the time.

Expert evidence is needed in almost every case that goes to trial, because the court has to be told what a reasonably competent member of the profession would have done, and that is a matter for somebody in the profession. The expert explains the standard. The judge decides whether the defendant met it. The protocol asks each side to say whether an expert has been appointed, and an early opinion from one, before the letter of claim is sent, saves a great deal of money on claims that should not be brought and adds a great deal of weight to those that should.

Our guide to commercial disputes covers what happens once proceedings are issued.

Frequently asked questions

What do I have to prove in a professional negligence claim?

Three things. That the professional owed you a duty, which follows from the engagement. That their work fell below the standard of a reasonably competent member of that profession, judged at the time and without hindsight. And that the mistake caused you a loss that competent work would have avoided, with a figure on it. The third element is where most claims are won or lost, because the claimant has to show what would have happened differently and prove the loss with documents.

How long do I have to sue an accountant or solicitor?

Six years from the negligent work in contract under section 5 of the Limitation Act 1980, and six years from the date you first suffered damage in tort under section 2. Where the damage was hidden, section 14A gives three years from the date you first knew enough to bring a claim, and section 14B bars any negligence claim more than fifteen years after the negligent act whatever you knew. If you have just discovered an old mistake, take advice immediately, because the three-year period may already be running.

What is the Professional Negligence Pre-Action Protocol?

It is the procedure the court expects both sides to follow before a claim is issued against a professional. The claimant sends a preliminary notice and then a letter of claim setting out the allegations, the loss and the documents. The professional acknowledges within 21 days and has three months from the acknowledgment to send a letter of response or a letter of settlement. The parties then negotiate, and either can issue proceedings if nothing is agreed within six months of the acknowledgment. The protocol does not stop the limitation clock.

What is adjudication in a professional negligence claim?

A voluntary scheme in which an independent adjudicator gives a written decision on the claim, or on a particular issue in it, on the documents and to a fixed timetable. The parties agree in advance whether the decision binds them or stands only until a court decides otherwise. The protocol asks each side to say whether it is willing to adjudicate and to give reasons if not. It suits claims where the facts are in the documents and the argument is about competence and loss.

Can I fund a claim without paying fees up front?

Often, where the claim is strong. A conditional fee agreement means reduced or no fees if the claim fails and a success fee if it wins, and a damages-based agreement means the solicitor takes a percentage of what is recovered. Neither covers the other side's costs if you lose, which is what after the event insurance is for. Check any legal expenses cover bundled with your business insurance first, because it may already cover a claim against a professional.

My business has received a letter of claim. What do I do first?

Notify your professional indemnity insurers immediately, in the way the policy requires, before you reply to the claimant. Most policies are written on a claims-made basis and make prompt notification a condition of cover, and most prohibit admissions without the insurer's consent. Acknowledge the letter within the 21 days the protocol allows, say insurers have been notified, and gather the engagement letter, terms of business and the file. The insurer will usually direct the substantive response within the three-month period.

Is a bad outcome the same as negligence?

No. A professional who exercised a judgement within the range a competent practitioner could reach has not been negligent, even if the outcome was poor, and a practice accepted as proper by a responsible body of the profession is usually a defence. The standard is judged on the information available at the time. A claim succeeds where no reasonably competent member of the profession would have done what this one did, and where that failure caused a loss that can be proved.

Sources & further reading

• Professional Negligence Pre-Action Protocol
• Limitation Act 1980, section 2
• Limitation Act 1980, section 5
• Limitation Act 1980, section 14A
• Limitation Act 1980, section 14B
• Practice Direction on Pre-Action Conduct and Protocols

This article is general information, not legal advice. The law changes and depends on your circumstances — always take advice on your specific situation before acting. Last reviewed 22 September 2026. AD Solicitors Limited is a recognised body regulated by the SRA (no. 8011228).