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New Tests are Coming for Professional Negligence Claims

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Following recent Supreme Court rulings in two professional negligence cases, the Court has outlined a “wholly new legal roadmap” for professional negligence claims made in England and Wales.

As a result, the Professional Negligence Lawyers Association (PNLA) have said that existing claims will now need to be reviewed, stating that “for many there could be a substantial impact on the likely chances of success and the assessment of financial loss”.
The cases in question are Khan v Meadows [2021] and Manchester Building Society v Grant Thornton UK LLP [2021]. The first case centred on whether a medical expert, who failed to diagnose that a mother carried the haemophilia gene, was liable for the costs associated with her son’s autism as well as his haemophilia, whilst the second case concerned whether accountants Grant Thornton were liable for the costs of a building society withdrawing from interest rate swap contracts

Providing the judgements in both cases, Lord Hodge and Lord Sales said they were heard together so the court could “provide general guidance regarding the proper approach to determining the scope of duty and the extent of liability of professional advisers in the tort of negligence”.
The PNLA commented: “Both judgments are essential reading for practitioners in professional negligence and liability cases – medical and non-medical − providing a wholly new legal roadmap.”

The recent judgements significantly alters the tests orginally laid down by the House of Lords in South Australia Asset Management Corporation v York Montague [1997], known as the SAAMCo ruling, which has dominated the law of professional liability since 1997 and limited the recovery of damages by claimants against professionals.

Industry observers claim that the new tests add extra layers of analysis and complexity to the application of SAAMCo principles and are likely to lead to more disputes over the recovery of damages for professional negligence.
Applying the new principles, the majority held that the building society’s loss fell within the scope of Grant Thornton’s duty and was recoverable in contract and the tort of negligence. Lord Leggatt and Lord Burrows agreed, for their own reasons.

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Latest News

  • Following recent Supreme Court rulings in two professional negligence cases, the Court has outlined a “wholly new legal roadmap” for professional negligence claims made in England and Wales. As a result, the Professional Negligence Lawyers Association (PNLA) have said that existing claims will now need to be reviewed, stating that “for many there could be a substantial impact on the likely chances of success and the assessment of financial loss”.The cases in question are Khan v Meadows [2021] and Manchester Building Society v Grant Thornton UK LLP [2021]. The first case centred on whether a medical expert, who failed to diagnose that a mother carried the haemophilia gene, was liable for the costs associated with her son’s autism as well as his haemophilia, whilst the second case concerned whether accountants Grant Thornton were liable for the costs of a building society... Read More

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