Every line this catalogue has taught so far covers something that breaks: a building, a cargo, a system, an asset immobilized by a state. Financial lines cover nothing of the kind. The loss here is a claim, that is, a letter by which someone asserts to someone else that money is owed. There is no wreck to photograph, no deposit line on a wall, no gust reading. That absence of a physical object is not a presentational detail: it governs everything else in this course, beginning with the question of what was at fault.
The first and most stubborn confusion treats a bad outcome as a fault. An adviser whose recommendation turned out badly, an architect whose building costs more than forecast, an accountant whose client was reassessed: in all three there is a loss, a dissatisfaction and often a letter. There is not necessarily a fault. The distinction turns on what the professional undertook to do, and not on what the client hoped to obtain.
One must therefore state the distinction structuring this whole subject, between an obligation of means and an obligation of result. A professional owing means has undertaken to bring to bear the diligence, competence and care that a reasonable professional of that speciality would have brought: it is at fault if it did not, and not because the outcome is bad. A professional owing a result has undertaken to obtain a specific thing: it is at fault if that thing is not obtained, whatever its diligence. Almost all advisory professions fall under the first, and that is what makes their losses so hard to establish.
The practical consequence is that the burden of proof lies almost always on the claimant, and that it bears on three distinct elements which must be kept apart. A fault, that is, a departure from what a reasonable professional would have done. A loss, quantified and certain. And a causal link between the two, that is, the demonstration that without the fault the loss would not have occurred. A file resting on two of the three does not prosper, and the third, causation, is the one that fails most often.
Causation deserves dwelling on, because it is where files in this line are won and lost. A tax adviser failed to point out a more favorable regime: it must still be established that the client, informed, would have chosen it, which is not a given. A lawyer let a deadline pass: it must still be established that the lost action had prospects, and the indemnity will then bear on that lost chance alone and not on the whole of what was claimed. Loss of a chance is thus the commonest measure of indemnity in this line, and it produces settlements far below the amounts claimed.
It must be added that a professional is judged not only on what it did, but on what it said and on what it kept. The duty to advise, the duty to warn and the duty to inform produce faults consisting of nothing but a silence, and a silence leaves no trace. A professional who warned orally and wrote nothing finds itself having to prove a negative, which is very difficult. That is why, in this line, the quality of a professional's files matters as much as the quality of its work.
What should be retained from this first lesson is a reversal of the ordinary reflex. Faced with a professional liability claim, the first question is not whether the client suffered a loss, it is what the professional undertook to do, and whether a reasonable professional in the same circumstances would have acted differently. The following lessons all deal with the same difficulty seen from another angle: since the loss is a letter and not an event, it must be decided when it occurred, and that decision belongs to the contract.
An accounting firm of eighteen staff faces a claim from an industrial client. In 2023 the firm prepared the company's accounts and did not point out that a tax scheme applicable to its activity would have allowed a tax saving now assessed at 340,000 euros across three financial years. The client discovered this in 2026 when changing firms, and claims the 340,000 euros plus 60,000 euros of catch-up fees. The engagement letter signed in 2022 provides for the preparation of annual accounts and tax returns, and mentions tax advice "on request". The firm's file contains an internal note from 2023 flagging the scheme, and no trace of any exchange with the client about it. What is this claim worth?
The three elements should be taken in order rather than arguing about the amount, since the amount is what will move most. On fault, the firm is in difficulty and the 2023 internal note is what puts it there: it establishes that the scheme had been identified at the time, which removes the most convenient argument, that of not having known. The engagement letter limits tax advice to the client's requests, which is arguable, but a duty to warn generally survives beyond the contractual perimeter where the professional actually knows of an important point, and the absence of any trace of an exchange leaves the firm having to prove a negative. On loss, the figure of 340,000 euros is an unrealized tax saving, a loss admissible in principle, but one requiring two checks nobody has yet made: that the scheme was genuinely applicable to the company's situation across the three years, and that the period for reclaiming from the tax authority has expired, since whatever can still be recovered from the authority cannot be claimed from the firm. The 60,000 euros of catch-up fees follows a different logic and is argued separately. On causation, which is where this file will settle, the question is not whether the scheme existed, it is whether the client, properly informed in 2023, would have chosen it: most such schemes carry a constraint in return, a commitment of duration, a cap, an investment obligation, and nothing says the director would have accepted it. Indemnity will therefore very probably rest on loss of a chance, that is, on a fraction of the 340,000 euros and not on the whole, that fraction being argued by reference to the probability that the client would in fact have opted in. Two steps finally impose themselves, and the first is urgent: check whether a tax claim remains open, because a claim still possible against the authority reduces the loss accordingly, and that period is running.
- 01The loss is a claim and not a physical event: no physical object exists to date it, and it is the contract that will decide its date.
- 02A bad outcome is not a fault: almost all advisory professions owe means, not a result.
- 03Three elements to establish, and the third fails most often: a fault, a quantified loss, and a causal link between them.
- 04Loss of a chance is the commonest measure of indemnity in this line, and it produces settlements far below the amounts claimed.
- 05A duty to advise is breached by a silence, and a silence leaves no trace: the quality of a professional's files weighs as much as the quality of its work.