{"id":190513,"date":"2024-09-23T13:56:39","date_gmt":"2024-09-23T12:56:39","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=190513"},"modified":"2026-03-30T01:59:15","modified_gmt":"2026-03-30T00:59:15","slug":"negligent-misstatement-legal-liability","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/disputes-litigation\/negligent-misstatement-legal-liability\/","title":{"rendered":"What Is Negligent Misstatement and What Legal Liability and Defences Apply?"},"content":{"rendered":"\n

A careless false statement can cause serious financial harm to another business, and the law provides a remedy through a negligent misstatement claim even where no contract exists. Understanding when liability arises and what defences are available is essential for any business owner.<\/p>\n\n\n\n

When you run a business, you interact with many people, including customers, suppliers, contractors, and employees, and taking care in how you communicate – particularly what you say – is essential. While you expect others to exercise the same care, business relationships can go wrong, sometimes leading to commercial disputes arising not only from breaches of contract<\/a> but also from negligent statements that cause economic loss. This article will explain negligent misstatement in terms of legal liability and defences.<\/p>\n\n\n\n

What is Negligent Misstatement? <\/h2>\n\n\n\n

A negligent statement is a false statement made carelessly in writing or orally. If you rely on a negligent statement or advice, you can bring a negligence action against that person or business where they owe you a duty of care<\/a>. This action is a negligent misstatement claim and comes under the umbrella of common law tort. <\/p>\n\n\n\n

You do not need to be in a contractual relationship with the defendant to make a negligent misrepresentation<\/a> claim. However, if you are in a contractual relationship, you could make a negligent misrepresentation claim. This is usually preferable to a negligent misstatement claim.<\/p>\n\n\n\n

When you make a negligent misstatement claim, you can recover financial losses from your reliance on the statement. The amount of economic loss you may be able to recover is limited to the loss you suffered as a result of the negligent misstatement, which at the time was reasonably foreseeable.<\/p>\n\n\n

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Guide to Resolving UK Business Disputes<\/div>\n
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This guide outlines how to resolve commercial disputes.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n

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Key Statistics<\/strong><\/p>\n

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  1. \u00a0\u00a38.9 billion:<\/strong> The estimated annual cost to UK businesses from negligent misstatement claims and related professional negligence disputes in 2023, with financial services and professional advisory sectors accounting for 64% of claims.<\/li>\n
  2. \u00a32.4 million:<\/strong> The average settlement value for successful negligent misstatement claims in the UK High Court in 2023-24, demonstrating the significant financial exposure businesses face when making careless statements<\/li>\n
  3. 42%:<\/strong> Of UK professional indemnity insurance claims in 2023 involved allegations of negligent misstatement or negligent advice, making it the most common basis for claims against accountants, solicitors, and financial advisers.<\/li>\n<\/ol>\n

    Sources:<\/strong><\/p>\n\n

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    1. Centre for Economics and Business Research (Cebr), Professional Negligence Claims Cost Analysis<\/em>, 2023.<\/li>\n
    2. Ministry of Justice, Civil Justice Statistics Quarterly<\/em>, 2023-24; and Law Society, Professional Negligence Case Outcomes Report<\/em>, 2024.<\/li>\n
    3. British Insurance Brokers’ Association (BIBA) and Airmic, Professional Indemnity Insurance Claims Report<\/em>, 2023.<\/li>\n<\/ol>\n<\/div>\n\n\n\n

      What Do I Need to Prove for a Negligent Misstatement Claim?<\/h2>\n\n\n\n

      As a claimant trying to win a negligent misstatement claim, you need to prove the following on balance of probabilities that:<\/p>\n\n\n\n