Professional Negligence Law in Australia

Please note that LOCATE A LAWYER® does not provide any services relating to personal injury law, and that the information below relates to all aspects of professional negligence law except for those relating in any way to a personal injury. If your matter relates to a personal injury claim, then you must not use this service. This is because we do not in any way advertise or solicit a potential claimant to make a claim for compensation or damages for personal injury, as this is prohibited by the Personal Injuries Proceedings Act 2002 (Qld) and other corresponding legislation in other states and territories.

Individuals who work in professional fields owe their clients or patients a duty of care to act with reasonable care and skill.

A non-exhaustive list of professionals include:

  • Accountants;
  • Advertising agents;
  • Architects;
  • Auditors;
  • Bankers;
  • Building consultants;
  • Builders;
  • Computer consultants;
  • Engineers;
  • Financial Planners;
  • Legal Practitioners;
  • Real Estate Agents & Valuers;
  • Surveyors;
  • Trustees; and
  • Veterinarians.

If a professional fails to competently discharge their professional duties (for example, through poor financial advice, accounting error, engineering mistakes, misrepresentations, incorrect evaluations, negligent treatment or incorrect advice), their clients or patients have a legal right to claim financial compensation for loss resulting from the failure on the professional’s part.

Elements of Professional Negligence

To claim for compensation for loss or damages, the plaintiff must establish the following elements:

  1. There was a duty of care owed to the plaintiff by the professional: A duty of care is the duty to avoid acts or omissions, which are reasonably foreseeable to cause damage to another individual. Whenever an individual is participating in an act, which he or she can reasonably foresee would be likely to injure another individual, that first individual owes a duty of care to that other individual. An individual owes a duty to those so closely and directly affected by his or her conduct that they ought reasonably to have them in contemplation as being so affected when undertaking the conduct in question. In circumstances where a professional has a client or patient in their care or following their advice, this duty of care will be easily established.
  2. The professional breached the duty of care: The question will arise as to whether or not the advice or actions taken by the professional were to a standard (or the course of action that a competent professional in his or her field and circumstances would have provided or undertaken).
  3. The applicant has suffered loss or damage owing to the breach of duty by the professional: If no loss or damage can be proven, then the court cannot grant compensation, even if the services provided are proven to have been negligent.

Defences to Professional Negligence

  1. Voluntary assumption of risk (consent to risk) by the plaintiff: If the court finds that there was a voluntary assumption of risk, the professional will not be liable.
  2. Contributory negligence by the plaintiff: This is where the conduct by the plaintiff prevents their right to full recovery for loss suffered, as the plaintiff contributed to the loss by their own negligence. In such instance, the court will determine that the damages are apportioned to each of the parties.

The court will assess the evidence to satisfy each of the elements and consider the standard of care to be reasonably expected of that professional, the care actually taken, any contributory negligence of the plaintiff or evidence of vicarious liability. The court will also consider the manner in which the professional services were delivered.

Negligent Mis-statement at Common Law

Traditionally the courts were hesitant to grant a remedy for negligent advice leading to financial loss; however, where a special relationship exists between the parties, a cause of action arises. This special relationship can exist even where the advisor does not profess any particular skill or judgment, but if the plaintiff takes the professional’s advice upon a serious matter and in circumstances justifying reasonable reliance, the court will find in favour of the plaintiff.

Applicable Legislation

The various states each have legislation pertaining to Professional Negligence:

The statutory limitation period to bring an action ranges from three to six years from the time that the loss or damage occurred.

Liability for professional advice under the Australian Consumer Law and Fair Trading Acts contain provisions that widen and extend the professional’s liability beyond the common law liability elements.

Disclaimer

Please note that LOCATE A LAWYER® does not provide any services relating to personal injury law, and that the information above relates to all aspects of professional negligence except for those relating in any way to a personal injury. If your matter relates to a personal injury claim, then you must not use this service. This is because we do not in any way advertise or solicit a potential claimant to make a claim for compensation or damages for personal injury, as this is prohibited by the Personal Injuries Proceedings Act 2002 (Qld) and other corresponding legislation in other states and territories.