2016 saw a reduction in the overall number of new claims against professionals, most likely reflecting the expiry of primary limitation for claims arising from the global economic crisis and the significant rise in court issue fees. However, this was not a universal phenomenon. Negligence claims against solicitors rose dramatically, fuelled by specialist law firms actively promoting their ability and willingness to pursue complaints, often on a contingency basis. So, what will 2017 bring?
Professionals, like everyone else, will always make mistakes – that is an inevitable part of business and life. But those managing risk in professional services businesses have never faced more challenges. In 2017 and beyond we expect to see the trend for professionals to outsource/offshore/onshore aspects of their work and to rely on large-scale data analytics to start giving rise to claims. The race to drive down cost by relying on less experienced staff and automation/artificial intelligence to undertake certain tasks will inevitably lead to mistakes being made whilst processes are perfected. Professionals should be cautious of over-reliance on automation; clients should be clear about what service they are paying for.
An increasing concern for professionals comes in the form of politically-motivated inquiries and regulatory intervention. The role of advisors in transactions which have later given rise to sensational headlines has never faced greater scrutiny, irrespective of whether professional standards have been maintained or not. Often such interventions give rise to significant disclosure exercises and participation in investigations at considerable, sometimes uninsured, cost to professionals. Those targeted by such enquiries should seek urgent advice about the scope of their obligation to comply with demands made of them.
Finally, before long we expect to see claims against professionals for failing to keep their clients' data secure or arising from the consequences of a cyber-attack. It is difficult to believe that the Mossack Fonseca “Panama Papers” incident will be an isolated occurrence when UK professionals reportedly face thousands of online attempts to access their data and accounts every year. The duties on professionals to maintain the confidentiality of their client’s information and preserve client funds are absolute, so the ramifications of a leak/loss are potentially very serious. Whilst professionals must ensure that their cyber security is always up to date, clients faced with information leaked by their advisors should seek legal and PR advice without delay.