“But for” test in professional negligence compensation claims
If you have suffered financial loss as a result of the professional negligence of an accountant, architect, barrister, engineer, construction firm, IFA, insurance broker, lawyer, surveyor, valuer or other professional, you may be able to claim compensation. Talk to the professional negligence lawyers at Healys today for more information.
The “but for” test
In many claims for professional negligence, a relevant test for causation is the “but for” or sine qua non rule.
What this rule imposes is the test of whether the financial loss sustained by the claimant would have been suffered without the negligent act of the defendant.
In the event that a judge decides the loss would have occurred regardless of the defendant’s advice, actions or services, the defendant will be unable to claim any sums of compensation – a situation that applies even if negligence has been proven.
Conversely, any ruling that financial loss would not have occurred “but for” the actions of the defendant professional is likely to clear the way for a payout – in such circumstances the negligence is said to be the “proximate cause” of harm.
For example, if a claimant (A) invests in a property based on an unreasonably inaccurate and inflated rental valuation from a defendant (B), and goes on to sustain financial loss as a result following the outcome of this valuation, A is likely to have strong grounds for a claim.
Haugesunde Kommune v Depfa ACS Bank
However, it does not always follow that a claimant will be entitled to receive compensation for the whole of loss.Haugesunde Kommune v Depfa ACS Bank despite involving a Court of Appeal claim against a firm of Norwegian solicitors made by an Irish bank, is a good recent example of the limitations of the “but for” test.
In his summary of the case Lord Justice Rix stated, “Merely because in one sense it can be said that the transaction would not have taken place but for the solicitors negligence … it does not follow that the solicitor is liable for the whole of the bank’s loss.”
Professional negligence lawyers in London and Brighton
For specialist advice and assistance with a professional negligence claim, talk to our London and Brighton teams, by using our call-back form, emailing partner Robert Johnson or calling directly on 020 7822 4106.