Cause and Effect in Professional Negligence Claims (Part Two) - Update from Court of Appeal

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Michael Axe reports on a recent Court of Appeal decision that reinforces how difficult it can be to prove that the negligent advice provided was the actual cause of the losses suffered. This follows on from our earlier article "Cause and effect – establishing the true cause of damage in professional negligence claims".

In order to successfully bring a claim for professional negligence, it is not enough for a claimant to merely show that their professional advisor provided negligent advice, they must also prove that the negligent advice was the true cause of any losses which the claimant suffered. However, the line between those losses which were caused by the negligent advice and those losses which were not is a fine one.

In a recent case, the Court of Appeal had to decide whether a firm of Norwegian solicitors was liable for significant losses suffered by an Irish bank arising from a transaction it entered into with two Norwegian local authorities. As if to demonstrate just how complicated this area of law is, although all three judges in the Court of Appeal agreed to overturn the original judgment against the solicitors, they each arrived at the same decision but for slightly different reasons.

The judgment in this case highlights how difficult it can be to establish the true cause of the losses suffered. It may seem illogical to some for the Court of Appeal to agree that the transaction would not have taken place at all but for the solicitors' negligence, but to then decide that the solicitors' negligence was not the actual cause of the losses. And whilst the simplistic approach would be to assume that if there had been no negligence, there would have been no transaction, and if there had been no transaction, there would have been no loss, this decision illustrates that things are rarely that straightforward in professional negligence claims.

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Published In: Civil Procedure Updates, Professional Malpractice Updates, Business Torts Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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