The shingle theory states that when a broker-dealer is involved in the securities business, they are implicitly promising that all their employees will behave fairly and adhere to professional standards. This implies that they must maintain a high level of conduct, as they are presenting themselves as experts in investments and securities. The shingle theory is an expansion of the ‘holding out’ principle in common law, and it dictates that brokers who present themselves as experts will be held to a stricter standard of care when providing recommendations to customers and managing their accounts.
The concept that a broker-dealer must adhere to a strict code of conduct is based on the understanding that by engaging in the securities business, the broker-dealer implicitly assures the public that all its employees will act fairly and in accordance with professional norms. For instance, when a broker-dealer advertises their services, they are presenting themselves as knowledgeable professionals in the securities industry. Consequently, they are expected to exercise a higher level of care when providing recommendations to clients and managing their accounts. This notion, known as the shingle theory, is an expansion of the common law principle of “holding out.” It implies that when brokers hold themselves out as experts in a specific issuer’s investments or securities, they are held to a heightened standard of care in their actions.
The Shingle Theory is a legal concept that refers to the principle that a person who hangs out a shingle, or advertises their services as a professional, is held to a higher standard of care and responsibility in providing those services.
The Shingle Theory applies to professionals such as lawyers, doctors, accountants, and other professionals who hold themselves out as experts in their field. It means that they are expected to possess the necessary knowledge and skills to provide competent services to their clients.
If a professional fails to meet the standard of care under the Shingle Theory, they may be held liable for professional negligence or malpractice. This means that they can be sued by their clients for any harm or damages caused by their negligent actions or omissions.
To prove professional negligence under the Shingle Theory, a client must demonstrate that the professional breached their duty of care by failing to meet the standard expected of them. They must also show that this breach directly caused harm or damages to the client.
Yes, professionals accused of professional negligence can raise various defences, such as arguing that they met the required standard of care, that the harm or damages were not caused by their actions, or that the client’s own negligence contributed to the harm suffered.
The Shingle Theory primarily applies to professionals who hold themselves out as experts in their field. However, in some cases, non-professionals who provide services or advice in a professional capacity may also be held to a similar standard of care under the Shingle Theory.
The Shingle Theory is generally applied to individuals who provide professional services. However, in certain circumstances, businesses or corporations that hold themselves out as experts in a particular field may also be held to a higher standard of care under the Shingle Theory.
The Shingle Theory is a legal concept that is derived from common law principles and is not governed by any specific laws or regulations. However, various statutes and regulations may exist that establish the standard of care for specific professions.
The Shingle Theory primarily applies to civil cases involving professional negligence or malpractice. It is not typically used in criminal cases, as criminal liability requires proof of intent or a specific criminal act.
The Shingle Theory is a legal principle that cannot be waived or modified by a professional. It is a fundamental duty of professionals to provide competent services, and any attempt to waive or modify this duty would likely be unenforceable in court.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 16th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/shingle-theory/
- Modern Language Association (MLA):Shingle Theory. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/shingle-theory/.
- Chicago Manual of Style (CMS):Shingle Theory. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/shingle-theory/ (accessed: May 09 2024).
- American Psychological Association (APA):Shingle Theory. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/shingle-theory/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts