In Scotland, the test for establishing professional negligence was authoritatively stated by the Inner House in the seminal case of Hunter v Hanley more than 60 years ago. Lord Patrick set out the tripartite test that has formed the bedrock of professional negligence claims ever since: 1) there must be a usual and normal practice; 2) it must be proved that the defender has not adopted that practice; and 3) no professional person of ordinary skill would have adopted the same course of action as the defender, if acting with ordinary care.
The application of this test to particular situations has been finessed over the years and it is worth noting that the English High Court set the bar slightly lower, referring to a “reasonable body” of professional opinion in the famous case of Bolam v Friern Hospital Management Committee which followed two years after Hunter v Hanley.
When it comes to deciding what information a professional must give their client about the risks of a particular course of action, this test has now been enhanced by the application of a more stringent duty. A Supreme Court ruling in March 2015 in the Scottish case of Montgomery v Lanarkshire Health Board ruled that the Hunter/Bolam tests do not apply to a doctor advising their patient of the risks involved in a medical procedure. Instead, the test in this situation is to take reasonable care to ensure that the patient is aware of any material risks involved in the recommended treatment, and of any reasonable alternative treatments. A risk is “material” if a reasonable person in the patient's position would be likely to attach significance to it.
This alternative test effectively reverses the previous approach of looking at the professional’s state of mind to determine whether there has been negligence; instead of looking at what a reasonable professional would have done, the test requires consideration of what a reasonable patient would be entitled to expect.
The Montgomery decision recognises the fact that the lower courts in England had effectively been applying this test to medical consent for some time and it was heavily rooted in principles of fundamental human rights and an individual’s right to determine what happens to their own body. However, the Northern Irish Court of Appeal decision of Baird v Hastings & Co. quickly followed in May 2015 applying the same test to solicitors advising their clients. Whilst recognising that the doctor/patient relationship has different considerations to the solicitor/client relationship, the Court in Baird held that a solicitor should take reasonable care to ensure that the client understands the material legal risks that arise in any transaction, with materiality determined by whether a reasonable client would be likely to attach significance to a risk.
The English High Court ruling of O’Hare v Coutts & Co. in September 2016 has now also applied the same test to warnings given by financial advisers about investment risks. This judgment expressly ruled that the reasoning in Montgomery is not limited to the medical context, and it now seems likely that this chain of case law will develop to encompass most, if not all, types of professional when warning a client about the risks involved in any course of action. The new challenge, and risk to a professional, lies in identifying what a reasonable client might consider a significant risk and warning them accordingly.