When bringing a professional negligence claim, one of the most complex and essential legal questions is the scope of the professional’s duty. Whether you are bringing a claim against a solicitor, accountant, surveyor, or financial adviser, establishing that they owed you a duty of care is only the beginning. The court must also determine precisely what that duty covered and whether your loss falls within it.
This article explains the concept of scope of duty in professional negligence cases under UK law, highlighting recent legal developments and how this test is applied in practice.
What Is the Scope of Duty in a Negligence Claim?
The scope of duty defines the boundaries of what a professional was legally obliged to do (or not do) when acting for a client. It is not enough to show that a professional owed you a duty of care and was negligent. The loss you suffered must fall within the scope of that duty.
In other words, the court will ask: was the loss you suffered the kind of loss the professional was supposed to protect you against? If not, your claim may fail even if there was clear negligence.
This principle was reinforced by the Supreme Court in the landmark case of Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20, which reformulated how English courts determine scope of duty in professional negligence claims.
The Six-Stage Approach to Professional Negligence Claims
In Manchester Building Society, the court established a structured six-stage test to guide negligence claims. It is now the leading authority on scope of duty. The stages are as follows:
- Is the harm actionable in negligence?
The court considers whether the claimant has suffered a type of harm recognised by law as giving rise to a negligence claim. - What are the risks of harm to the claimant against which the law imposes on the defendant a duty to take care?
This helps determine the relevant scope of duty. - Did the defendant breach their duty by their acts or omissions?
This requires establishing that the professional’s conduct fell below the standard expected of a reasonably competent practitioner in their field. - Is the loss for which the claimant seeks damages the consequence of the defendant’s act or omission?
This addresses causation and whether the defendant’s breach actually caused the loss. - Is there a sufficient nexus between the duty breached and the loss suffered i.e., is the loss within the scope of the duty?
This is the crucial stage. If the loss is not within the scope of the duty, the claim will not succeed. - Is the loss too remote?
The court must also assess whether the loss was reasonably foreseeable or too remote to be compensable.
The fifth stage is the key to understanding how the law deals with scope of duty in professional negligence claims.
The SAAMCO Principle Revisited
Prior to Manchester Building Society, scope of duty was primarily governed by the House of Lords case South Australia Asset Management Corp v York Montague Ltd [1997] AC 191, commonly known as SAAMCO. The SAAMCO principle held that professionals who provide information (rather than advice) are only liable for losses that fall within the scope of that information.
Under SAAMCO, courts drew a distinction between:
Advice cases: Where the adviser assumes responsibility for the overall decision, and is liable for all foreseeable consequences of bad advice.
Information cases: Where the professional only supplies part of the information used to make a decision, and is only liable for losses attributable to inaccuracies in that information.
While this distinction was maintained in later cases, it often proved difficult to apply. In Manchester Building Society, the Supreme Court acknowledged these difficulties and clarified the law, although the basic SAAMCO principles still influence the analysis.
Practical Examples of Scope of Duty Issues
To understand how scope of duty operates in real cases, consider the following examples:
A solicitor may fail to register a charge at Companies House, resulting in the client losing priority to another creditor. If the solicitor’s duty was to secure the client’s interest, the loss is within scope.
A surveyor negligently overvalues a property used as security for a loan. If the lender suffers loss because of a fall in property prices generally, not because of the valuation error, that loss may fall outside the surveyor’s scope of duty.
A financial adviser recommends a tax-avoidance scheme without explaining the risk of HMRC challenge. If the client later receives tax penalties and interest, the loss may be within scope because it was exactly the type of risk the adviser should have warned about.
Each case depends heavily on the specific nature of the professional’s retainer, their responsibilities, and what the client was relying on them for. Our expert team of professional negligence solicitors at LEXLAW are highly experienced in dissecting these issues and can provide clear, strategic advice tailored to the facts of your case.
Scope of Duty and Expert Evidence
Often, expert evidence is crucial in determining scope of duty. An expert can assist the court in understanding the standards expected of a reasonably competent professional in the same field, and whether the loss claimed was within the foreseeable risks the professional ought to have addressed.
Litigants must carefully frame their case around the actual duties the professional owed and show that the losses suffered were closely linked to those duties. This legal and evidential nuance requires careful drafting of the Particulars of Claim and supporting documentation. Our team of professional negligence solicitor has extensive experience in preparing robust, persuasive claims that align with the scope of duty principles recognised by the courts. We ensure your case is accurately presented to maximise the prospects of recovery.
Recent Case Law Developments
In addition to Manchester Building Society, the courts have applied and refined scope of duty principles in recent cases:
Khan v Meadows [2021] UKSC 21 – In a clinical negligence case, the court found that a GP who failed to test for a specific genetic condition was only liable for the consequences of that specific condition, not for unrelated disabilities.
AssetCo v Grant Thornton [2020] EWCA Civ 1151 – The Court of Appeal clarified that auditors may be liable for losses flowing from their failure to identify going concern issues if the loss was foreseeable and within the scope of the duty.
These decisions show that courts now favour a more fact-sensitive and principled approach to scope of duty, rather than rigid categorisations.
Why Scope of Duty Matters
Understanding the scope of duty in a professional negligence case is vital. It determines whether the defendant professional can be held legally responsible for your financial losses. Even where clear negligence has occurred, the claim can fail if the court finds that your loss falls outside the remit of what the professional agreed or was expected to do.
This concept can be complex, and early legal advice is essential. At LEXLAW, our experienced professional negligence lawyers regularly advise clients on complex scope of duty issues. We are skilled at analysing the contractual and regulatory framework around a professional’s responsibilities to determine whether your claim is legally viable. Seeking early advice from a specialist firm like ours can ensure that your case is properly structured from the outset and give you the best chance of success.
Need Expert Legal Advice on a Professional Negligence Claim?
Do you believe a professional’s mistake has caused you financial loss? If you want expert legal advice, do not delay in instructing us so we can assess the legal merit of your case.
We can often take on such claims on a no win no fee basis (such as a Conditional Fee Arrangement or Damages Based Agreement) once we have discussed the claim with you and then assessed and advised you on the merits of the proposed professional negligence action.
Our expert legal team of leading Professional Negligence Solicitors & Barristers can provide urgent help, advice or representation to you. Just call our Professional Negligence Lawyers on 02071830529 or email us now.
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