The Negligent Professional: Liability for a Fair Share?
The legal issue of the 1970s and 80s was the extent of professional liability to third parties. Now that this has been controlled1 that of the 1990s threatens to be the extent of liability to the client. Particular problems arise in two different types of situation. First, where the client would not have entered a particular transaction had the professional given proper advice. Such a professional may be fully liable for all the losses suffered as a result of entering the transaction although a range of other factors may have influenced the client. The second situation is where the fault of the professional is subsidiary to that of another wrongdoer. The typical case is one where the client has retained a professional to provide protection from losses caused by the failings of others and such losses would not have occurred had the professional acted properly. The professional will be liable to the client for the full loss even though his fault may have been subsidiary in relation to that of the other wrongdoer. In both situations it is arguable that the negligent professional is being asked to bear an unfair share of the client's losses when other factors or actors are as much a cause. This paper will examine the nature of the problem in the no-transaction and subsidiary fault cases and suggest that although professionals can help themselves through the use of clauses limiting liability, there is a case for the courts using the notion of fairness to limit the extent of liability in problem cases.
Causal principles are the basis of the professional's liability in a notransaction case. Where a client would not have entered a loss-making transaction but for the professional's negligence, the courts have been prepared to adopt a restitutionary approach, awarding the client what he has paid out on the transaction less what, acting reasonably, he has recovered____________________