Last Updated on 5th March 2025
One of the most frequently asked questions we are asked is, ‘How much compensation can I claim for professional negligence?’
Find out how much compensation you could recover for your professional negligence claim by calling our national helpline for a free consultation on 0333 888 0403, or by emailing details to [email protected]
In most instances it is pretty straightforward to identify the amount of compensation that is likely to be recovered in a successful professional negligence claim. The calculation is primarily based on the financial loss that has flowed directly from the actions of the wrongdoer.
So, if for example a solicitor misses an important time limit and your case is struck out as a consequence, then you will claim compensation for the financial losses you have incurred as a direct result of the solicitor’s carelessness. This will usually be the value of the case that has been lost, together with any wasted legal costs.
Remoteness, foreseeability and the SAAMCO principle
But sometimes, the compensation that claimants wish to recover can give rise to more challenging legal issues. Under English law for instance, compensation cannot be claimed for loss that is deemed to be too ‘remote’ from the error or not ‘reasonably foreseeable’.
It can be difficult for someone who is not legally trained to appreciate the nuances of remoteness and foreseeability. Indeed, even some solicitors struggle with these concepts.
At the heart of many disputes concerning the level of compensation that can be recovered is the “SAAMCO principle“, named after a 1996 case which said that:
“a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action. He is responsible only for the consequences of the information being wrong.”
The facts in the SAAMCO case were relatively simple. A valuer negligently overvalued a property that the bank was going to use as security. SAAMCO claimed the negative equity on the property that had occurred as a result of a market crash. The logic of their argument was that if the valuer had not over-valued the property in the first place, SAAMCO would not have invested in the property so that when the market crashed it wouldn’t have made even greater losses. The courts disagreed, stating that there was a difference between “advice” and “information”. In this instance, the valuer had merely given information on the value of the property; what SAAMCO then did with it was up to them, but the valuer could not be held responsible for the consequences of the information being wrong.
Confused? It isn’t easy to immediately grasp the nuances of the judgment, particularly as there wasn’t much guidance given about the differences between “advice” and “information”. It is a cause of legal argument as to whether something is or is not “information” or “advice”. As the Supreme Court in another case stated:
“information given by a professional man to his client is usually a specific form of advice, and most advice will involve conveying information. Neither label really corresponds to the contents of the bottle”
Supreme Court clarification
It is welcome relief therefore that the Supreme Court has finally made its decision in Manchester Building Society -v- Grant Thornton UK LLP [2021] UKSC 20 and dispensed with the confusing “information” and “advice” differences. The case is quite similar to the facts of SAAMCO. Based on negligent advice by Grant Thornton, MBS entered into a serious of fixed rate mortgages hedged against long term swaps but as a result of the most recent financial crash, MBM had to close out the swaps incurring significant transaction fees and losses. The Supreme Court held that the scope of the duty of care is governed by the purpose of that duty, judged on an objective basis by reference to the reason why the advice was being given and what risk it was intended to guard against. It set out six questions that need to be asked in each case, which are paraphrased here:
1 Is the harm which is the basis of the claim, actionable in negligence? (actionability)
2 What are the risks of harm against which the law imposes on the wrongdoer, a duty to take care? (scope of duty)
3 Did the wrongdoer breach their duty of care by this act or omission? (breach)
4 Is the loss the consequences of that act or omission? (factual causation)
5 Is there a sufficient link between the harm and the wrongdoer’s duty of care as analysed in (2) above? (duty nexus)
6 Is a particular element of the harm irrecoverable because it is too remote, or was caused by something else? Or because the Claimant mitigated their loss, or failed to mitigate it? (legal responsibility)
This clarification has made an immense difference in helping to identify and determine what is likely recoverable in a claim – almost a “cheat sheet” for lawyers. There will still be difficult questions that need to be answered to establish each of the above queries but it does help identify the issues that need to be considered.
How we can help with quantifying the compensation you can recover in your professional negligence claim
If you are wondering, ‘How much compensation can I claim for professional negligence?’, then contact us for a free consultation. Our specialist professional negligence solicitors will be happy to give you guidance on the compensation that can be claimed in any particular scenario. While it is not always possible to identify a precise figure right at the outset, it is usually possible to establish the basic legal principles that will apply and use them to offer an informed estimate of what the compensation is likely to be.
