Financial advisors offer a wide range of products and services, such as advising on investments like stocks and shares, unit trusts, open-ended investment companies, investment trusts and personal pension schemes.

It’s only right that you expect your financial advisors to provide you with a professional service. You could have a professional negligence claim if the service received was below a reasonable standard of skill and care and as a result you have suffered a financial loss.

If you think you have a claim against your financial advisor, please contact us at Downie & Gadban and we’d be happy to assist.

Examples

There are many circumstances where it may be appropriate to pursue a claim against your financial advisor. Some examples include:

  • Failing to give competent financial advice
  • Failing to act in your best interests, including mis-selling a financial product to you (e.g., investment bond, pension, ISA)
  • Failing to correctly advise on pensions, including withdrawal from final salary schemes
  • Failing to advise of the risks of the investment or to recommend a suitable investment which matches your risk profile
  • Failing to advise appropriately in relation to tax avoidance schemes
  • Failing to properly assess your financial circumstances
  • Failing to advise on contribution limits
  • Failing to advise on the implications of products recommended
  • Failing to ensure you can afford the product or investment
  • Failing to comply with the Financial Services and Markets Act 2000

CONTACT US

If you wish to discuss a case with us, please contact our professional negligence specialist, solicitor Mark Robertson, on 01420 81270 or fill in the form below.

Should you make a complaint first?

The Financial Ombudsman Service (FOS) handles complaints about financial advisors. You may also be able to complain to the Financial Conduct Authority, although any compensation may be limited. Any financial advisor has a statutory duty under the Financial Services and Markets Act 2000 to perform their work with reasonable care and skill.

All financial advisors who are registered with the FCA are required to have professional indemnity insurance. This means that, whatever the resources of the financial advisor, any successful professional negligence claim should be covered by their insurance.

It is important to remember that the time limit on bringing a professional negligence claim will not pause while you are going through the complaints process. If you are not sure about the best option for your claim, contact us at Downie & Gadban and we will be happy to advise.

Why Downie & Gadban?

Downie & Gadban’s team of professional negligence specialists have extensive experience in pursuing disputes involving professionals, including financial advisors. We give practical and pragmatic guidance using clear and plain-speaking language to ensure you achieve the best possible outcome. Our specialist professional negligence solicitor is a member of the Professional Negligence Lawyers Association, giving you the confidence that you will receive expert advice on how to progress any claim.

Frequently Asked Questions

Professional negligence is when a professional has failed to perform their services and responsibilities to the required standard. This type of claim can be made against professionals such as solicitors, barristers, accountants, architects, independent financial advisers, surveyors and insurance brokers.

Claims are based on one or more of the following legal causes of action:  breach of (a) contract; (b) duty of care in tort of negligence; (c) fiduciary duty; and / or (d) statutory duty.

Establishing negligence alone is not enough to bring a claim. It is vital to show that the professional’s negligence has caused you a financial loss. A professional may have acted negligently, but if their actions or advice did not cause any loss then a claim will not succeed.

Every professional negligence claim has three essential elements. These are:

  • Duty of Care: The professional owed you a duty of care. This duty is usually specified within the professional’s terms of business or an engagement letter. In addition, professionals are also under a general duty to act with reasonable care and expertise within their chosen industry.
  • Breach of duty: The professional breached the duty owed. A professional will be deemed to have breached their duty of care to you if they have made an error which no reasonable member of that profession would have made.
  • Causation: Loss was caused as a result of that breach and, but for the professional’s negligence, you would not have suffered that loss.

It is vital that all three elements are established for there to be a viable claim. A claim will not be possible if one is missing.

You have the burden of proving a negligence claim against the professional. This is on the balance of probabilities i.e., more likely than not or 51% or more. It will be necessary to prove the duty of care, the breach of that duty and that this breach has caused you a financial loss.

Expert evidence may also be required. This is usually another professional in the same field of expertise. For example, an expert architect is necessary in a claim against an architect to give their opinion on the standards of what a reasonably competent architect should have properly advised.

At Downie & Gadban, we will review and investigate all of the evidence in support of your claim. This will involve obtaining a copy of the professional’s file, including any retainer, terms and conditions, emails, letters and other documentation.

Once a potential claim has been investigated and it appears to be worth pursuing, you are required to comply with a procedure known as the ‘Professional Negligence Pre-Action Protocol’. This is to ensure an early exchange of information and hopefully a resolution of the dispute without the need for proceedings.

The central steps to the Professional Negligence Pre-Action Protocol are as follows:

  • Preliminary Notice: As soon as there is a reasonable chance that a claim will be brought, you are expected to notify the professional in writing with a brief outline of the grievance and an indication of the financial value of the claim. The professional should acknowledge this letter within 21 days.
  • Letter of Claim: Once the potential claim has been investigated, it is necessary to send a Letter of Claim to the professional. This is a detailed letter setting out the facts upon which the claim is based, the allegations against the professional, how they caused the alleged loss and how the loss is calculated.

The professional should acknowledge receipt of the Letter of Claim within 21 days of receiving it. They will then have three months from the date of acknowledgement to investigate the claim and respond.

  • Letter of Response: Once the investigations have been completed, the professional should send a Letter of Response. This will set out the answers to the allegations and whether the claim is admitted or denied.

Usually, further negotiations will follow between the parties, as they are expected to consider whether the claim can be resolved prior to any court action.

The Professional Negligence Pre-Action Protocol means that the average timescale for completing the pre-action phase is generally 4-10 months from the date of the Letter of Claim.

The correct measure of loss is to put you in the same position you would have been in had the negligence not occurred.

The level of damages can also be impacted by other factors. For example, you have a duty to mitigate losses and therefore you cannot recover damages for losses which could have been avoided by taking reasonable steps.

The professional may seek to argue that you have caused or contributed to the losses suffered. This is referred to as the defence of contributory negligence. That can result in the amount of compensation being reduced to reflect the relative share of blame.

The value of your claim can be a complex issue. We will advise you on this in clear and straightforward language.

There are deadlines by which different types of claims must be issued. The usual limitation period is six years from the date on which the professional was negligent. It may be possible to extend this period if the negligence only become apparent at a later stage. In such cases, the limitation date can be extended up to three years from the date you became aware of the negligence. This extension is subject to a 15-year-long stop date.

Once limitation has expired you will be ‘time-barred’ from bringing any claim. Limitation is therefore an important part of our investigations.

As experienced professional negligence solicitors, we will consider the professional’s ability to afford any claim at the outset. After all, there is little benefit in throwing good money after bad in pursuing a claim against an opponent with limited or no assets. Fortunately, professionals are often required by their regulator to have Professional Indemnity Insurance in place to protect against legal claims of this nature.

It may be appropriate to make a formal complaint prior to considering a professional negligence claim. Professionals are required to have a procedure for handling complaints, which they should make clear at the outset. However, it is important to be aware that the time limit for bringing a claim does not stop whilst you are going through the complaints process.

Our expert team can advise you not only on whether you have a potential claim, but on the best funding option to help you pursue it. Many people are deterred from bringing a claim because they worry about legal costs or are tempted simply to search for lawyers who exclusively offer ‘no-win, no-fee’ arrangements. We are experienced at providing a range of flexible options to ensure you can make the best choice for your situation and particular claim.

  • Family Legal Protection: Many people will already have legal expenses insurance as part of their household or motor insurance. Before progressing any claim, it’s important to check whether you have this and what the policy covers.
  • Standard hourly rate: This is where you fund the case from your own financial resources, rather than from any award that is given in the event of a successful claim. We will inform you at the beginning of the likely cost of your claim and keep you up to date if we think this estimate will change.
  • Conditional Fee Arrangement (CFA): This is the traditional ‘no-win, no-fee’ agreement, where a success fee is paid if you win your professional negligence claim.
Downie & Gadban Solicitors - Mark Robertson

Mark Robertson

SENIOR SOLICITOR

[email protected]
Tel: 01420 81270

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