Paying Peanuts for Monkeys

When looking at a claim against a professional for negligent work, otherwise known as "professional negligence" does the amount of the fees charged by that professional make a difference to what standard of service you should have expected?

The Court of Appeal in the case of Minkin v Landsberg [2016]1 WLR 1489, recognised that clients’ financial constraints could lead to very narrow use of professional advisers. For instance, this could include carrying out discrete tasks such as merely formalising an existing agreement between divorcing spouses.
Further, the courts have remained willing to focus on the size of a fee when considering the scope of a defendant professional’s duties and the tasks that the professional could be expected to perform. In the case of Thomas v Hugh James Ford Simey Solicitors [2017] 5 Costs LO 643, the Court of Appeal described a claims handling arrangement under which defendant solicitors were paid a fixed fee of £607 to pursue an industrial injury claim
as not one which required them to “turn over every stone”.

However, this pragmatic approach has not always been followed. In the case of Denning v Greenhalgh Financial Services Ltd [2017] PNLR 19, a defendant IFA was sued for not revisiting advice by a previous adviser. The Court was heavily influenced by the fact that the defendant was
being criticised for not performing extra work which was not included in his fee.

These cases suggest that the Courts have a defendant-friendly approach towards duty of care. This was emphasised in the case Bank of Ireland v Watts Group PLC [2017] EWHC 1667 TCC, in which the court was prepared to turn the claimant’s costs budget back against it. They criticised a claimant lender for a “lack of realism” in pursuing a negligence claim against defendant valuers who had only charged £1,500 for their services, when the expert evidence used to attack that work had cost £24,000 to obtain.

But beware, because you could get yourself into a problem just by offering to do a favour for no cost. In a 2017 case, the Court of Appeal decided that an architect providing gratuitous project management services for her former next door neighbours did owe a duty of care where the services were provided “in a professional context and on a professional footing”.

So the message is that, although cases are very much fact specific, in appropriate circumstances the duties of a professional undertaking work can be interpreted on a narrow basis depending on the bargain that was struck.