The professional negligence claims process demystified

Ifyour business faces a claim for professional negligence it can be a stressful, timeconsuming, expensive and confusing process. So that you’re prepared, should theworst happen, we’ve outlined below the professional negligence claim process andwhat to expect in a typical claim scenario.


Professionalindemnity policies require you to notify your insurers if you become aware of aclaim against you in relation to your professional activities, or you becomeaware of a circumstance which may give rise to a claim.

Ifyou have any doubt as to whether you should notify a claim or circumstance youshould consult with your insurance broker and they will advise you. It is worthremembering that simply making a notification to your insurers does notnecessarily mean that you will have to pay higher premiums or that yourbusiness becomes a less attractive risk. Depending on the size of your businessand the type of activities you undertake insurers may be more concerned if youaren’t notifying occasional issues. It could suggest that you are not givingadequate consideration to risk management.

Failingto notify claims and circumstances promptly can often exacerbate a problem andpotentially prejudice your own and your insurers position. It is important tobuild a culture within your business where staff and colleagues come forwardwith any concerns, rather than either ignore the issue or attempt to resolve itthemselves.

Thepre-action phase

Onceyou have notified a claim or circumstance, insurers will usually ask fordetailed information on the matter to enable to them to give the case fullconsideration. They will also ask for your views on whether you believe youmight have a liability to your client, together with your thoughts on thepotential value of any loss.

Ifyou have received a letter which purports to be a pre-action protocol letter ofclaim you will need to follow the procedures laid down in the relevantpre-action protocol, details of which can be found on the Ministry of Justicewebsite. Your insurers will guide you through the process and will appointlawyers and experts as appropriate.

Tonegotiate or not

Partiesto a dispute can negotiate at any time. Quite often formal dispute resolutionmechanisms, which generally fall under the banner of Alternative DisputeResolution (ADR) are used. This typically takes the form of a mediation orwithout prejudice meeting. The aim is to attempt to resolve the dispute in aneffective way and keep costs to a minimum. Although it is not obligatory toengage in ADR, the courts take a dim view of parties who do not engage with it– unless they have good reason not to.

Ifyou are faced with a claim it is important to give careful consideration to therisks attached to continuing to fight a claim. The costs and time spentfighting a case can quickly become disproportionate. Taking a commercialapproach (even if you are sure that the claimant’s position is unreasonable)can often pay dividends in the long-run.

Thelitigation phase

Ifa claim is not resolved in the pre-action phase or through ADR, litigationmight ensue depending on the appetite the claimant has for pursuing the matter.

Assumingthat there are no issues arising out of whether your policy will respond, yourinsurers will appoint solicitors (if they have not done so already) and theywill act under a dual retainer advising both you and insurers.

Thankfully,as noted above, it is quite rare that a claim will end up at trial. Preparationfor and conduct of a trial is a costly and time consuming business. There isalso no guarantee of success. You could get the wrong judge on the wrong day.The courtroom is also a very public place to air your dirty linen. That is notto say that some cases shouldn’t be defended vigorously. Just pick your battlescarefully and go into the courtroom with your eyes wide open having fullyassessed the risk with your advisors.

Aprofessional negligence claim - what might you need to do?

Ina typical claim scenario you might have to:

  • Gather and review relevant papers topresent to your insurers as a claims notification. This might include liaisingwith colleagues and other parties to obtain all relevant information anddocumentation.
  • Engage in drafting correspondence for yourinsurers to review. Generally insurers will ask you to draft responses tocomplaints and claims for their consideration.
  •  Hold meetings with insurers, lawyers andother relevant parties.
  • Attend mediations and even a trial if amatter escalates. It is thankfully quite rare that professional negligenceclaims end up with a trial, but the process of attempting to rebut or (ifnecessary) settle a claim is often lengthy.

Ifyou would like to find out more about the professional negligence claimsprocess please call 0117 929 3344 or requesta call at a time that is convenient for you.