Is it negligence – or just a mistake? How to tell and what to do next

What is professional negligence?

Professional negligence happens when a professional fails to meet the standards reasonably expected in their field, and that failure causes financial loss to their client. Common examples include:

• Advice that falls short
• Oversights that prove costly
• Inaction when action was needed

Professionals are held to a higher standard because of their expertise. But not every error is negligent – the key question is whether their conduct dropped below what’s reasonably expected.

What do you need to prove?

To bring a successful claim, a business must establish four key elements:

1. Duty of care – Was there a legal duty? This is usually straightforward if there’s a contract or formal engagement.
2. Breach of duty – Did the professional’s actions fall below the expected standard?
3. Causation – Did that breach directly cause the loss? This is often the most contested part.
4. Loss – Has the business suffered a measurable financial loss?

Each element must be clearly evidenced – and that’s where early legal advice can make all the difference.

Common misconceptions

Many businesses hesitate to act (or respond) because of uncertainty or myths. Here are a few we hear often:

• “A mistake equals negligence.” Not always. Professionals can make reasonable judgments, even if the outcome isn’t ideal. But if their conduct falls short of the expected standard, a claim may arise.
• “I wasn’t the direct client, so I can’t claim.” Sometimes, third parties can bring claims – if reliance and duty can be shown.
• “It’s too late to act.” Most claims must be brought within six years – but there are exceptions. It’s worth checking.

Practical first steps

If you think your business may have been impacted by professional negligence:

• Gather documentation – Contracts, emails, reports, and advice are key.
• Assess the timeline – Claims are subject to limitation periods.
• Seek early legal advice – A solicitor can assess your position and guide you through the Pre-Action Protocol, which encourages early resolution.

How Greenwoods can help

We’ve advised on professional negligence claims across sectors, from defending pension scheme claims worth over £700 million, to helping global businesses resolve multi-million-pound disputes.

Our experience spans financial services, legal, maritime, and energy sectors. We understand the commercial realities professionals and businesses face – and we focus on resolving matters constructively, whatever side of the claim you’re on. Whether it’s a valuation dispute, a question over advice, or a potential claim, we’ll help you assess the situation and navigate the process with confidence. Please get in touch.