The role of dispute resolution in professional negligence claims

24th November 2023

When professionals fail to meet the expected standards, causing financial loss or damage to their clients, it is termed professional negligence.

This can be particularly distressing for business owners, leading to significant financial implications and potential harm to their reputation.

Dispute resolution plays a crucial role here, offering a pathway to compensation without the need for lengthy and costly court proceedings.

Understanding professional negligence

Professional negligence arises when a professional, be it a solicitor, accountant, architect, or any other expert, breaches their duty of care to their client.

This could involve carelessness, a lack of skill, or a failure to exercise due diligence. The ramifications for a business can be severe, ranging from financial losses to operational disruptions.

The necessity of dispute resolution

Dispute resolution encompasses various methods used to resolve disagreements without resorting to litigation. It is particularly beneficial in professional negligence cases for several reasons:

  • Cost-effectiveness – Legal battles can be expensive. Dispute resolution methods such as mediation or arbitration can significantly reduce costs for both parties.
  • Time saving – Court cases can drag on for months or even years. Dispute resolution processes are generally much quicker, helping businesses to save valuable time.
  • Confidentiality – Unlike court cases, which are typically public, dispute resolution proceedings are private, helping to protect the business’s reputation.
  • Control – Dispute resolution offers the parties more control over the outcome. In a court case, the decision is in the hands of the judge or jury.
  • Preservation of relationships – Dispute resolution can be less confrontational than court proceedings, which can be important if the parties wish to maintain a professional relationship post-settlement.

Amanda Kenton v Slee Blackwell LLP

The case of Amanda Kenton v Slee Blackwell LLP illustrates the critical role of dispute resolution in professional negligence claims.

Here, a law firm provided ‘unrealistic’ cost estimates in a professional negligence claim against another firm. The senior costs judge ruled that the costs incurred were ‘likely to be unreasonable’, leading to a significant discrepancy between the estimated and actual costs.

The original bill was over £340,000, but the judge ruled that only more than £60,000 should be paid.

This case was settled with Kenton required to pay £40,000 plus VAT and a reasonable success fee of £20,000 plus VAT. The judge’s criticism of the ‘hopelessly unrealistic’ initial estimates highlights the importance of accurate cost information in dispute resolution.

The process in action

The dispute resolution process in professional negligence cases typically follows these steps:

  • Identification – Recognising that a professional has failed to meet their obligations.
  • Engagement – Both parties agree to engage in a dispute resolution process.
  • Selection – Choosing the appropriate method of dispute resolution.
  • Preparation – Gathering all necessary evidence and documentation.
  • Resolution – Engaging in the process itself, which may involve several rounds of discussions or hearings.
  • Settlement – Reaching an agreement or receiving a decision from the arbitrator.
  • Enforcement – Implementing the terms of the settlement or decision.

For business owners facing the challenges of professional negligence, dispute resolution offers a viable alternative to traditional litigation.

It provides a means to address grievances efficiently and effectively, with the potential to save time, reduce costs, and maintain confidentiality.

Our expert team of dispute resolution solicitors are here to help should you need to bring a claim for professional negligence. Contact us today for guidance.