Professional negligence case law round up 2025

CONTENTS:

Case Law

Legislation & Regulatory Update

Artificial Intelligence

Conclusion

As we embark on a new year, we look back on a busy year in the professional negligence sphere, with a number of published judgments in the past 12 months or thereabouts, as well as new legislation. Developments in the use of AI have also given us much to think about. 

In this new year bumper edition of our case law blog series, we take a look at the most notable cases of 2025. We also look at the procedural, regulatory and statutory updates which came into effect throughout the year and, lastly, we discuss the emerging AI trends for 2026.

Case Law

Have we lost the chance to instruct an expert? And, if so, are our pleadings on the loss of that chance sufficient? We take a brief canter through the reported decisions in 2025 (with a special mention for a couple of cases from the tail end of 2024) where strong themes emerged surrounding the correct approach to pleading out a loss of chance case and the continued need for an expert report in professional negligence claims.
 

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Legislation and regulatory updates – 2025 in professional liability 

Prescription

Prescription Act 2018

The law of prescription (time-bar) has seen some significant development in Scotland over the last couple of years. Of particular note has been the case of Tilbury Douglas v Construction Limited v Ove Arup & Partners Scotland Limited. Tilbury was heard in the Outer House of the Court of Session in 2023, then on appeal to the Inner House in 2024, and had been due to be heard on appeal in the UK Supreme Court at the beginning of December 2025. The appeal was withdrawn however, and so the law currently rests with the Inner House judgment.  

The case particularly concerned the application of sections 6(4) and 11(3) of the Prescription and Limited (Scotland) Act 1973 (the “1973 Act”). The 1973 Act is the core legislation dealing with time-bar in Scotland. The parties in the Tilbury case had been arguing about whether Tilbury’s claim had prescribed – had it been brought out of time? The arguments around section 6(4) concerned whether Tilbury had been induced into error that it did not have a claim, and section 11(3) concerned whether there were continuing acts which would affect when the clock began to run for the purposes of prescription. To summarise very broadly, at first instance the Outer House had given Tilbury Douglas a lifeline and held s11(3) of the 1973 Act was engaged to delay the start of the clock and s6(4) was also engaged on the basis of Ove Arup’s reassurances and continued services in relation to the site design.  

However, the Inner House on appeal decided in favour of Ove Arup and found that Tilbury’s claim had prescribed. This was based on stricter interpretations of sections 6(4) and 11(3) and how they applied to the particular facts of this case. The overall impact of the Inner House decision, now not appealed, is that the provisions of prescription as applied left the landscape more favourable for defenders than pursuers.  

That all said, Tilbury considers the law prior to the Prescription (Scotland) Act 2018 (the “2018 Act”). The 2018 Act brought in a number of amendments to the 1973 Act, although the changes have been implemented in a phased manner. The 2018 Act seeks to address what has been perceived as potential unfairness in the way the interpretation of the provisions of the 1973 Act has developed in the courts. In particular, some sections, such as s11(3), have been interpreted in such a way that the prescriptive clock may begin to run before a pursuer is aware there is a potential claim.

In a previous blog, our knowledge team wrote about the changes brought in by the 2018 Act. The first changes from the 2018 Act were brought into effect in June 2022. The changes included changes to the way the start of the prescriptive clock was determined, and the addition of the ability for parties to agree to an extension of the prescriptive period for up to a year.

The remaining changes to be made by the 2018 Act were brought into force in February of 2025. Of particular interest for professional negligence claims will be the changes to section 6 of the 1973 Act. Section 6(4) provides for periods of time to be discounted from the prescriptive period where a pursuer has been induced into not raising a claim by fraud or error caused by the defender. As can be seen in the Tilbury case, case law in this area has focused on what conduct by a defender can amount to an inducement, and what constitutes error on the part of the pursuer. New language has been added to s6(4) which changes the section from operating where a pursuer has been induced to refrain from making a claim, to simply failing to make a claim. Inducement is still referred to in relation to error. The upshot of this is that to engage section 6(4) will no longer require the defender to have specifically induced the pursuer into not making a claim. The defender might induce error which in turn leads to failure to a claim, but inducement is not needed in relation to that failure to make a claim, it need only be a consequence of the induced error (or fraud). This shifts some of the emphasis from the defender’s knowledge and intentions to the effect of the defender’s actions on the pursuer, the pursuer’s knowledge, and causation. This is augmented by the addition of a new section 6(4A) which explicitly states that the defender’s intentions in its words and conduct are not relevant.

For now, in a limited (and reducing) number of cases, the pre-2018 Act rules may still apply. However, the new rules have already begun to be applied and in the next few years we’ll see how interpretation of the new provisions will be applied by the courts. Any judgments will inevitably be scrutinised for the impact they will have.

Legal Professionals

Regulation of Legal Services (Scotland) Act 2025

The Regulation of Legal Services (Scotland) Act 2025 (the “2025 Act”) aims to introduce significant reform to the operation of legal services in Scotland. The 2025 Act includes a number of substantial changes, including a basis for law firms to be entirely owned by non-lawyers. The implementation of this provision is to be overseen by the regulator of Scottish solicitors, the Law Society of Scotland, and has been subject to some debate.

For the purposes of professional liability, of most interest is likely to be the changes to the complaints system. The Scottish Legal Complaints Commission (SLCC) remains the first port for complaints about Scottish solicitors and firms. The 2025 provides it with more scope and flexibility. For instance, when initially assessing complaints, the SLCC can treat complaints about individuals as complaints also against the firm. It can receive complaints about legal services which were provided by non-regulated individuals (e.g. non-solicitors) for a fee. The previous categories of complaint, conduct and services, have been widened to conduct, services and regulatory. The changes are intended to streamline the complaints process for both complainers and legal professionals.

In addition, the 2025 Act emphasises the need for regulators (which includes both the Law Society of Scotland and SLCC) to act in the interests of consumers and the public interest, making this an explicit objective of legal service regulation.

The provisions of the 2025 Act have not yet come into force, although the SLCC and Law Society of Scotland have already indicated they are working on plans for implementation. We therefore expect more news on the 2025 Act this year.

Scottish Solicitors Disciplinary Tribunal (SSDT) standard of proof

In a very recent change, in December 2025 the SSDT voted to apply the civil standard of proof to professional misconduct.

Previously, the SSDT had been applying the higher criminal standard of proof: beyond reasonable doubt. The civil standard of proof is on the balance of probabilities. The change will therefore make it easier for complainers to establish professional misconduct. The change will be of concern to solicitors, but likely be welcomed by complainers. Within the context of professional liability, the SSDT sits as a body for referral of conduct complaints, e.g. regulatory breaches. It does not cover matters of negligence and can award maximum compensation of £5,000 to complainers, although of course has wider sanction powers including potential restriction and exclusion from practice for solicitors.  

The SSDT’s announcement indicated that it would be implementing the change “as soon as practicable”. We expect an update on that implementation in the coming months. 

Financial services and pension professionals

 
The Consumer Duty

The Consumer Duty is a new set of rules introduced by the FCA in 2023 with the aim of raising standards and improving protection of consumers when accessing financial services and products. The Consumer Duty consists of a new core principle introduced by the FCA that “a firm must act to deliver good outcomes for retail customers”, together with cross-cutting rules relating to the Consumer Duty’s four outcomes. The Consumer Duty rules have been accompanied by significant guidance on how regulated individuals and firms are expected to implement the principle. 

The Consumer Duty rules sit within the FCA’s handbook, which sets out rules and standards for all FCA-regulated individuals and firms. Whilst not all financial professionals will be directly dealing with retail clients, the Consumer Duty can also affect wholesale firms where the end client may be a retail client, so is still of wider significance. 

Whilst the Consumer Duty rules and accompanying guidance are already in force, the FCA is continuing to publish updates on the industry’s embedding of the Consumer Duty. There have been a number of updates over the course of 2025, including good and poor practice in respect of the treatment of vulnerable customers in March and a statement in December on the FCA’s expectations of firms when working together to provide products and services to consumers. The FCA also published an update on its priority areas for development of the Consumer Duty in 2026. The identified priority areas include interaction between the Consumer Duty and data protection, conducting fair value assessments and sector-specific issues. The FCA has also launched an action plan to streamline its rules and reduce complexity for businesses following the introduction of the Consumer Duty. As with 2025, we expect there to be multiple updates from the FCA this year which will be of interest to financial professionals and consumers, including a consultation in the first half of the year on co-manufacturing and the application of the Consumer Duty through distribution chains.

Targeted support

Also concerning the provision of financial products and services to consumers, in June 2025 the FCA provided an update on its “Advice Guidance Boundary Review” undertaken jointly with the Treasury. The review aims to improve the suitability of financial support and services provided to consumers, particularly by looking at the boundaries between regulated support (“advice”) and non-regulated support (“guidance”).

The review was commenced in 2022 and was focused across 2024 and the early half of 2025 on pensions advice. In June 2025, the FCA opened consultation on proposed rules for ‘targeted support’. Targeted support refers to suggestions from firms for groups of consumers with common characteristics and is an attempt to bridge the perceived gap between advice and guidance, as well as improve access to financial support for consumers.

Following the consultation, the FCA published a policy statement in December 2025. The policy statement responds to the consultation and sets out proposed ‘near-final’ rules for targeted support. It was issued alongside joint policy statements with the Financial Ombudsman Service and Information Commissioner’s Office, setting out their proposed approaches to complaints relating to targeted support and the interaction of targeted support messaging with existing direct marketing rules under data protection law, respectively. At the same time as the policy statement, firms intending to apply for permission to offer targeted support now have access to the FCA’s pre-application support service to allow them to prepare for applications for the permission opening in March 2026. 

With the FCA indicating it was still on track for applications for permission opening in March 2026 and the targeted support rules expected to take effect from April 2026, we expect the next few months to include further updates and activity. The developments will be of interest to firms dealing with consumers, with targeted support offering new opportunities and risks. It will also offer consumers new ways to access financial services and products.

The Virgin Media case, and The Pension Schemes Bill 2025

The case of Virgin Media Ltd v NTL Pension Trustees II Ltd & Others [2024] EWCA Civ 843 has caused significant uncertainty and concern for the pensions sector, specifically in respect of defined benefit pension schemes that were formerly contracted out of the state pension from 6 April 1997. In this case, the High Court (subsequently backed up by the Court of Appeal), decided that where amendments were made to a contracted-out pension scheme that impacted accrued or future contracted-out benefits, a failure to obtain written actuarial confirmation that the scheme would still meet the statutory contracting-out requirements would render the amendments invalid. Our pension colleagues wrote about the fallout from the decision in February last year: The Virgin Media Case - Keep calm and carry on | Burness Paull.

In response to the concern in the sector and the potential implications of the decision, the government announced in June 2025 that it would introduce legislation to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the required standards. The Pension Schemes Bill which is currently progressing through the House of Lords sets out which alterations are ‘potentially remediable’, the conditions that need to be met, and the process that scheme trustees and the scheme actuary would need to follow. The pensions industry is keenly awaiting the final version of the legislation. Professionals involved in the pensions industry, whether trustees, auditors or other advisers, will want to keep a close eye on developments and the professional obligations which flow from these.

Property and construction professionals

 
Building safety

In March 2025, the Scottish Government published its response to the Grenfell Tower Inquiry's final report, accepting all of the inquiry’s recommendations as far as they apply in Scotland. The Scottish Government’s response focused on moving to active, risk-based regulation. It included committing to new legislation to strengthen the building standards system, developing the Compliance Plan Approach; stronger powers for local authorities; and publishing and progressing its Cladding Remediation Plan of Action. Actions on these workstreams have continued, along with progress on UK-wide initiatives such as the creation of a singe construction regulator and work on other building safety issues such as RAAC in Scottish housing.

Most of the provisions of the Building Safety Act 2022 (the 2022 Act) already in place don’t apply to Scotland. However, the 2022 Act did make changes in two key areas, and the push for increased regulation and liability remains behind further developments this year.  

The key provisions of the 2022 Act that applied to Scotland were introducing statutory liability of certain parties for construction products and historic defaults relating to cladding products and providing specific extended prescription periods for claims relating the new statutory liabilities (generally 15 years for construction products, and 30 years for historic cladding products). We wrote about the significant UK Supreme Court decision in URS v BDW [2025] UKSC 21 which, whilst looking at a different section of the 2022 Act, showed that the courts are willing to take the purpose of the legislation, “ensuring that those directly responsible for building safety defects are held to account”, into account when interpreting the 2022 Act’s provisions. We expect the UKSC’s comments in that case are likely to be brought into disputes about claims arising from the Building Safety Act 2022 in Scotland. 

Following the Grenfell Tower fire, alongside the changes emanating from Westminster, Scotland has developed its own building safety legislation to tackle the perceived shortcomings of the prior landscape. This has included measures such as the Housing (Cladding Remediation) (Scotland) Act 2024 (the 2024 Act), applying to multi-residential buildings of 11 metres and above built between 1992 and 2022, which came into force in January 2025. The 2024 Act introduced single building assessments and the Cladding Assurance Register (which is expected to become public in 2026) and brought key powers to support the delivery of the Scottish Government’s Cladding Remediation Programme. 

In November 2025 the Scottish Developer Remediation Contract was published, a legally binding agreement between signatory developers and the Scottish Government. This obliges developers to identify and assess in scope buildings they developed/refurbished in Scotland between 1992 and 2022 and carry out certain remediation work identified to address risk to life caused by external wall cladding systems. Whilst some negotiations are understood to be continuing, one developer has signed the Developer Remediation Contract so far and more are expected to do so in 2026.

We also saw the introduction last year of the Building Safety Levy (Scotland) Bill (the “Levy Bill”). The Levy Bill proposes to introduce a new tax to be charged on construction or conversion of residential property developments from 1 April 2028. The funds from the levy are to be used for building safety expenditure and will bring Scotland into line with England (which already had provision for an equivalent building safety levy under the Building Safety Act 2022, which is due to be brought into force by secondary legislation in October 2026). The Levy Bill was debated this week in the Scottish Parliament, where its general principles of were (narrowly) agreed. While the need for building safety was undisputed, concerns were raised at the debate about the levy’s impact on the Scottish housing sector and further details and amendments are being called for. Professionals and developers will want to keep an eye on how the Levy Bill develops, who will be due to pay the levy, and how and when the fund will operate.  

Fire safety

As part of its 2025 Grenfell Response, the Scottish Government committed to undertaking a fundamental review of Section 2 (Fire) of the Domestic Technical Handbooks, beginning with a call for evidence expected in early 2026.

Meantime, in 2025, amendments were made to the Building (Scotland) Regulations 2004, to come into force on 6 April 2026. These amendments extend the Scottish ban of combustible external wall cladding systems to include hotels, guest houses, hostels and boarding houses; and extend the scope of the installation of automatic fire suppression systems in traditional buildings converted to hotel use.

Alongside legislative changes, professional regulatory changes also continue to be made which are influenced by the environment post-Grenfell. The Royal Institute of Chartered Surveyors (RICS) issued a practice alert in July 2025 for members providing fire and building safety services. The practice alert highlights the professional and regulatory requirements for undertaking fire and building safety services, with the aim of ensuring members have the appropriate skills, knowledge, experience and qualifications. Given the significant risks to life and property involved in fire and building safety, surveyors will want to ensure they are acting in alignment with RICS’ requirements and recommendations to limit risk of liability and/or regulatory issues. 

Professional regulatory duties sit alongside other regulatory duties, including health and safety/fire safety. Surveyors and their organisations owe health and safety duties to those they work with and for and to those who may be affected by their work activities, such as the public. Those duties cannot be contracted out although responsibilities and duties will generally reflect the chain of management arrangements. It is, however, worth bearing in mind that a breach of health and safety duty, including fire safety, can give rise to criminal investigations of organisations and individuals which could result in prosecution. No criminal charges have been brought, yet, in relation to Grenfell although multiple individuals and organisations are being investigated as suspects, which includes surveyors.

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Artificial intelligence  

Artificial intelligence (AI) presents exciting opportunities for professionals to operate more commercially for their clients. However, given its limitations, and the scope for misuse, it provides fertile ground for a range of claims against professionals. 

For lawyers, placing AI-generated false authorities (also known as hallucinations) before the court can result in potential contempt of court proceedings, adverse costs awards and regulatory referrals/claims – see, for example, the conjoined cases of Ayinde v London Borough of Haringey and Al-Haroun v Qatar National Bank [2025] EWHC 1383).

Similarly, professionals producing expert reports for the court require to ensure that where they have been AI assisted, they do not contain such hallucinations. In a recent US case, an expert report concerning “deepfakes”, which inadvertently contained citations to non-existent academic articles, was said to shatter the expert’s credibility and was ruled as inadmissible (see Kohls v Elison No 24-cv-3754 (D Minn 10 January 2025).   

Although we have not seen any reported cases to date, the next development will no doubt be professional negligence claims arising from misuse of AI. 

With the increasing integration of AI into professional services, and the likelihood for claims arising from its misuse, we foresee that it will be particularly pertinent for professionals, and their clients, to understand and keep abreast with the following topics.      

1.    Agentic AI

Although we are still grappling with Gen AI, and its propensity for hallucinations, Agentic AI is already on the horizon.

IBM helpfully summarises the difference as follows  – “A generative AI model like OpenAI’s ChatGPT might produce text, images or code, but an agentic AI system can use that generated content to complete complex tasks autonomously…Agents can, for example, not only tell you the best time to climb Mt. Everest given your work schedule, it can also book you a flight and a hotel ”.

For example, in the legal sector, agentic AI could be used to assist with litigation/negotiations by modelling likely outcomes and risks based on the case materials and relevant precedents and then updating strategy as and when new facts and sources come to light.  

The same risks apply as for gen AI but can indeed be amplified for agentic systems. It will be especially important for professionals to understand how such systems work and build in appropriate check points to avoid error propagation and losing the thread of the system’s reasoning over time. Further, professionals should consider updating/adapting any applicable terms of business and letters of engagement to take account of and explain the extent of its use in the services being provided.

2.    Confidentiality and legal privilege

Risks arise from confidential information being inputted into gen AI systems, forming part of the dataset and then becoming publicly available. Professionals should ensure that confidential information is removed when using public providers and that they satisfy themselves on the extent of the safeguarding provided by more specialised systems.

Gen AI notetakers are convenient tools for transcribing and summarising meetings which can be a time-consuming task. However, where professionals and clients wish to keep certain conversations/advice confidential and privileged, careful consideration should be given to whether such AI-generated records are securely stored in systems closed to the public.

Clients should also resist the temptation to double check legal advice received on public AI platforms to similarly avoid privilege potentially being waived in respect of it.

3.    Professional indemnity insurance 

RSA (master policy insurers for Scottish solicitors) have confirmed that AI systems are being treated the same as other technical tools and resources so that, provided they are being used to carry out work ordinarily undertaken by the firm, and in compliance with Law Society rules, then “the work will continue to be covered under the existing terms of the master policy… subject to the terms and conditions of the policy”. 

However, as the use of AI becomes ever more prevalent, and our understanding of its risk develops, we expect that insurers are likely to seek further assurances from insureds during policy applications and renewals and that insurance products will evolve. 

Lockton Brokers (brokers for the master policy) suggest that insurers may seek to manage risk by imposing warranties that the firm has, for example, obtained limitations of liability from its clients in relation to AI use and only used certified AI tools (if a suitable certification system develops ). The former would necessitate conversations taking place between professionals and their clients regarding the allocation of risk in the event of AI going wrong.  

In December, we published the first instalment of our series “AI: A Professional Negligence Perspective” which focused on how the use of AI interplays with specific duties professionals owe to their clients. If you are interested in any of the above topics, stay tuned for our further instalments in the series which will be published this year. 

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Conclusion

At the start of a new year, as we all make resolutions and try to predict what the year will hold for us, we have been reflecting on a question often asked of us: what trends do we see emerging in professional negligence claims in Scotland?

Although risk management has come a long way in all regulated professions, there are always new and emerging risks. We see claims arising from the use of AI as one of those. The use of it will bring exciting new ways of delivering professional services for all professionals, but so too will it bring risk.

For clients proceeding with claims in the Scottish courts in 2026, the role of expert evidence in cases, particularly arising from lawyers’ liability, will be an area of ongoing debate (probably literally!).

For all clients, whether a party pursuing a claim or a professional services firm defending a claim, grappling with the law on how one claims for a lost chance remains complex, but we can look back to Gough v Cannons from 2025 to remind us of the principles which ought to be applied to the analysis.

If you would like to discuss your circumstances, then please get in touch with your usual contact for professional negligence disputes at Burness Paull.

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