By Mark Sayer I Insights
Are Claims Consultants Liable for Incorrect Advice?
Claims consultants play a vital role in supporting contractors and clients through disputes, delays and compensation events. Their insights can shape the direction of a claim and its outcome. But what happens when that advice is wrong? Can a claims consultant be held liable for the consequences?
The short answer is: yes, under certain conditions.
The Consultant’s Duty of Care
All claims consultants have a professional duty of care to act with reasonable skill and diligence. This means:
• Providing accurate and well-researched advice
• Staying within the boundaries of their expertise
• Keeping clients informed of risks, alternatives, and potential outcomes
If advice is given that falls below this standard and it results in loss, liability may follow.
When Does Liability Arise?
Liability typically hinges on three core factors:
1. The scope of the engagement – What was the consultant hired to do?
2. The quality of the advice – Was it incorrect, misleading, or outside the consultant’s expertise?
3. The outcome for the client – Did the client suffer a financial loss as a direct result?
For instance, if a consultant encourages a contractor to pursue a claim that lacks legal or contractual merit and that leads to wasted legal fees or reputational damage they could be exposed to a professional negligence claim.
The Role of Engagement Terms
Most consultants operate under written terms of appointment, which often include limitation of liability clauses. These can cap liability to a fixed sum or restrict liability to specific types of loss. Clients should:
• Review these clauses carefully before appointing a consultant• Ensure expectations and deliverables are clearly defined
• Ask for clarity on how risks will be managed
Consultants, in turn, should be clear on what they are (and aren’t) advising on.
Professional Standards and Staying Up to Date
To reduce risk:
• Consultants must stay current with legal, contractual and procedural developments
• Maintain professional indemnity insurance
• Document advice, rationale, and key decisions throughout the engagement
Advising on claims requires both subject matter expertise and commercial awareness particularly as disputes become more complex and cross-functional.
Final Word: Precision Matters
In an industry where small errors can have big consequences, consultants must operate with precision, transparency and professional care. And clients should be clear on the scope, protections and responsibilities involved when engaging any claims support. Liability isn’t just a legal issue, it’s a matter of trust, reputation and impact.
Written by:
XX, Risk & Advisory Lead at Middleton
Supporting better decisions through clarity, accountability, and legal alignment.