Businesses that seek professional advice naturally expect it to be correct. When the advice given is wrong, the financial consequences can be extremely serious. Most professionals carry insurance and can be held liable in these circumstances, but the process of recovering the costs and expenses of poor professional advice can be time consuming, expensive, and not always successful.
This is why the Shoosmiths multi-jurisdictional malpractice team in England, Scotland and Northern Ireland launched a new product to help lenders target potential negligence claims against professionals that offers a route safer to recover losses.
Shoosmiths Lender Review, developed and led by partners Matthew Howarth, Andrew Foyle and Gillian Crotty, is a new way to pursue claims for secured loan losses – such as mortgage arrears on an incorrectly valued property or when the lender has not been properly advised by his lawyer – and includes a full range of support, including preliminary reviews, detailed audit assessments and internal training.
Matthew Howarth said: “This is a truly innovative product with a funding model that offers flexibility and sharing of risks and rewards. It is designed to help navigate the intricacies of considering the merits of a potential claim and provide an alternative, and more cost effective, path to recovery.
Instead of taking the traditional approach of making a claim against a defaulting borrower, Lender Review targets the professional responsible for the original mispricing or the original finalist law firm. An initial Triage review will detect audit documents to identify if there is indeed a potential claim against a professional and a viable path to recovery. Such triage review will be carried out within an agreed timeframe after receipt of key documents for each case. If the experts at Shoosmiths conclude that no further investigation is required, no costs are charged (other than disbursements) but if the case merits consideration on the merits, then a charge is only laid if a claim is. continued thereafter.
Review of merits, which will be completed within an agreed fixed timeframe after receipt of key documents, provides a more in-depth and fixed review and analysis that will recommend whether a claim should be pursued, and provides an estimate of the costs and time for potential recovery. For this more detailed assessment, all that is needed is a proforma instruction and the main transaction documents.
The Shoosmiths Professional Negligence team can also help audit overdue cases (remote or on-site) to identify potential complaints on current and historical cases, provide training to internal teams as well as identify and manage groups of claims against negligent professionals. This allows for economies of scale by initiating a single procedure for multiple transactions and also allows for the examination of cases with more modest shortfalls, rather than a conventional “one size fits all” loss threshold approach below which the claims were not considered economical to pursue.