Calling it bad service is not enough: Evaluating whether you have a claim for professional negligence.

We’ve all been there, finding ourselves having paid significant value for professional services (accountant, lawyer, etc.) that failed to meet our expectations.  We may even believe that the professional acted contrary to, or well below, the norms of the profession.  What can be done?    There are also instances where if you have been financially harmed by a licensed professional’s substandard performance, you may have may a legal claim for professional malpractice. 

While no two professional malpractice claims are alike, some general guidelines will help you begin to think through your circumstances.  To successfully bring a legal action for professional malpractice, you must satisfy all of the required legal elements, which are:

1. A relationship with the professional;
2. During which the professional acted below the standard of care;
3. Causing you harm; and
4. Resulting in damages.
   
   

Each of these elements warrants more specific discussion.     

(1) Did I have the requisite relationship with the professional service provider?
This sounds like an obvious and unnecessary question, and often, but not always,  it is easy to answer by referring to your service contract.  It can quickly become more complex. 

For example, if you, along with four partners, hired an attorney to draft corporate formation documents that were negligently drafted in manner that benefits one partner to your detriment, who did the lawyer represent? Was it all of the partners, the legal entity, or you individually?  What happens if that lawyer produces a document you signed acknowledging that you were advised to seek independent legal counsel?  Were you being represented in this instance and do you still have a potentially viable claim for professional malpractice?  Or, what if your business partner is also an attorney who  prepared the documents for your business venture?  Was your partner acting as your legal counsel in that instance?

If your company’s tax accountant negligently prepared business tax returns in a manner that negatively impacted your personal tax liability, do you individually have a claim for professional negligence against the accountant?   

If you were clearly not the client, is there any chance you can still sue?  In certain limited circumstances the law may allow a third-party to raise a professional negligence claim even though they did not have a first-party relationship.  For example, an estate beneficiary may be able sue for legal malpractice even though they did not have the attorney-client relationship that led to the creation of the will or trust of which they are a beneficiary.  Similarly, where professional accountants provide services to trustees, they may owe a duty to the trust beneficiaries in performing their work.  There may be other analogous situations that could permit a third-party to bring a professional negligence claim.

(2) Did the professional act below the standard of care?
We hire service professionals because they are trained in areas that we are not.  This can make it difficult to identify and describe negligent acts.  It is not merely bad service; an immaterial mistake; inexperience; customer dissatisfaction; questionable judgment or strategy decision; or a bad result.  It may not even be enough that the professional’s actions violated an ethical rule or practice guideline.   So, what is professional negligence?      

In South Carolina, professional negligence is where a “professional failed to conform to the generally recognized and accepted practices of [the] profession.”[1]  If this sounds vague, it is, and intentionally so.  South Carolina courts defer to members of the profession to establish generally recognized and accepted practices.  This is why in most instances of professional negligence, South Carolina law requires a claimant to provide an affidavit from an industry expert identifying the negligent acts of the defendant professional.

What can you do?  One step might be to speak with another professional in the same field to get a sense if the actions taken by your provider were acceptable in the industry.  Because of the challenge of identifying below-industry-standard conduct, you may want to seek advice from a professional negligence attorney early in your process even if you cannot clearly articulate the negligent acts.  As part of their case review process, a professional malpractice attorney will likely reach out to industry experts for assistance in identifying potentially negligent acts.  Often, the harm is evident first, followed by a realization that your professional may have committed malpractice resulting in the harm. 

(3) Did the negligent acts cause the harm (damages) I’m complaining of?
This sounds simple.  Frequently, it isn’t. 

Generally, the more directly connected the negligent act is to the resulting harm, the easier it is to prove a causal connection.  The more distant a negligent act is from the resulting harm, or the more variables in play, the harder it is to prove a causal connection.  A claimant must prove that the harm would not have happened “but for” the professional’s negligence, and that the type of harm suffered by the claimant was foreseeable.   

For example, your attorney fails to file your case within the required statutory time period and you can no longer file your breach of contract case in court.  The attorney’s failure in this instance is closely connected to your harm—the lost ability to bring a lawsuit.  However, what if the attorney did not file the case on time because you provided the wrong version of the contract at issue; your timeline of events contained a mistake; you never provided the documents the attorney asked to review before filing the case; or your business partner told the attorney not to pursue the case?  Now there is more distance, or more facts and variables, between the failure to file and the resulting harm.  Causation may be more difficult to prove.

The professional’s negligent acts must have caused the damage.  In legal malpractice, this is where the “case within the case” concept arises.  A legal malpractice claimant must prove that they “most probably” would have been successful in the original case, or received a larger settlement than they did, had the attorney not committed malpractice. 

If your attorney failed to file your case within the statute of limitations, but you would have been unable to prove a necessary element of your case, then there may be no damages to recover and no viable malpractice claim. 

Where there are multiple bad actors, or bad actors taking harmful actions facilitated through a professional, such as an accountant, there can be additional challenges to proving a causal connection to the licensed professional. Being able to establish that the professional was knowledgeable of the harmful conduct, or should have been, and aware of their role in facilitating such conduct may be an additional layer of proof that a claimant must establish to be successful.

Causation can often feel obvious to the person harmed, but in the law it is more nuanced, complex, and can be challenging to prove. 

This is an area where cases often fall short.  
 
 (4) Do I have any damages?
Again, this may feel obvious to the person harmed but it is often hard to quantify.  Sometimes this is because an expert will be needed to calculate damages. For example if you suffered lost investment growth, you may need an investment professional to calculate your damages.  In some cases it can be difficult to quantify the value of the right you gave up or lost, such as what a jury would have awarded had your lawyer not committed professional negligence.
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Lost business opportunities can be especially challenging to quantify where damages are based on a series of events that “could” or “should” have happened.  Delayed construction, delayed operation, or the lost ability to take advantage of a new business opportunity can sometimes  be damages, but there are many variables that can make it  harder  to connect the damages to the negligent act.  The same is true with regard to lost profits; these may be recoverable, but they need to be foreseeable and reasonably certain rather than based on conjecture or speculation.    
Professional malpractice can be complex, but hopefully this information will help you understand the basic approach to evaluating your potential claim.  We encourage you to reach out to our office to see if we can assist you in evaluating your potential professional negligence claim.


[1] Doe v. Am. Red Cross Blood Serv., 297 S.C. 430, 377 S.E.2d 323 (1989).