If you have suffered financial loss as a result of the negligent misstatement of a professional, it is worth seeking legal advice to determine whether you might be entitled to claim compensation for your losses.
What is negligent misstatement?
In simple terms, negligent misstatement is a misrepresentation of truth which, being taken at face value by the client, ultimately leads to them suffering some kind of disadvantage.
The tort of negligent misstatement
In a sense, the origins of negligent misstatement in tort are found in the earlier law of deceit, which although applicable to cases of deliberate deception did not account for cases where misstatement was attributable to negligence.
Because of this shortcoming in the law of deceit, unless action could be taken for breach of contract it was very difficult for individuals to claim compensation if they suffered loss as a result of negligent misstatement.
However, all this changed in 1964 with the case of Hedley Byrne v Heller & Partners. In this case the claimant, an advertising firm, had entered into a contract with a client, Easipower Ltd, based on information it was supplied by the defendant bank, Heller & Partners Ltd, regarding their client’s fitness for business.
After Easipower went out of business, the advertising firm was left with an unpaid bill of £17,000. Consequently, the firm took the case against Heller & Partners to the House of Lords.
The court found that the parties had sufficient proximity so as to create a duty of care. It was stated that liability for pure economic loss could arise in tort based on the “assumption of responsibility” – a responsibility the bank was deemed to have neglected.
This area of the law received further development in 1982, with a case which established that surveyors owed a duty of care when valuing a property for mortgage purposes (Yianni v Edwin Evans).
Claims of misrepresentation
If you have sustained financial loss as a result of the negligent misstatement or misrepresentation of a professional, it may be possible to bring about a professional negligence compensation claim , whether in tort, contract or under the terms of the Misrepresentation Act of 1967.
All cases are different, but the basic rule for establishing duty of care is whether the professional should have been aware that the advice they gave might give rise to a particular course of action.
Whether you wish to make a claim against an accountant, architect, auditor, banker, financial advice, lawyer or solicitor, talk to the professional claim lawyers at Healys LLP for more information about ensuring your rights.
We have offices in the legal hearts of London and Brighton and serve clients across the capital and the South Coast.