Where the conduct of an accountant is perceived to have fallen below accepted professional standards, they will leave themselves vulnerable to claims under professional negligence as a result of any loss caused to their clients. If such a claim ensues, it may have serious consequences for that professional’s reputation.
In England & Wales, accountants are regulated by the Association of Certified Chartered Accountants (ACCA) or the Institute of Chartered Accountants in England and Wales (ICAEW). The institutions possess formal complaints procedures where a client feels an accountant’s conduct has fallen short of professional standards. If these mechanisms are not considered adequate, the client may consider court action on grounds of professional negligence.
Complaints to the ACCA and ICAEW
The first port of call for complaints against an accountant is through the mechanisms offered by the ACCA and ICAEW. If a professional has been found to have conducted themselves improperly, a decision to this effect is made publically available. Further sanctions include the suspension of licenses and fines
If these mechanisms cannot properly resolve the issue, the client may wish to bring a claim for professional negligence.
Bringing a claim for professional negligence
In order to qualify as negligence, a distinction has to be drawn between inadequate service and actual negligence. The client must show that they suffered loss as a result of the accountant’s conduct.
Before commencing a claim, the parties must first reasonably attempt to reach a settlement agreement. If this cannot be accomplished, the client can initiate proceedings by having a claim form issued, which outlines their grievances and resulting loss. The accountant must indicate whether they intend to defend the claim, or file counterclaims against the client, by example for payments owed.
Grounds for claims
There a range of common basis for accountants to be subject to professional negligence claims. These include:
- negligent investment instruction, including incorrect valuation of shares;
- improper or incorrect tax advice; and
- failing to meet statutory deadlines with regards Companies House submissions.
The standard that an accountant is held to is whether their conduct met the required level of care and skill relative to how an equivalently qualified accountant might reasonably have conducted themselves in the same circumstances.
It is importance to note that a professional negligence claim cannot be grounded solely in the fact that a client did not get the result they desired. Rather, what is considered is whether the accounted acted with the requisite level of skill and care.
Time limits for bringing claims
A client must bring their claim against the accountant within six years of the incident giving rise to the claim, or three years from the point they became aware of the grounds giving rise to the claim. Failure to do so may result in forfeiture of any claims and loss of compensation.
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At Lewis Nedas, our team of Professional Negligence Lawyers have award-winning experience in professional negligence cases. We have successfully advised clients with highly complex and multi-faceted cases. To speak with one of our Professional Negligence Lawyers, please contact us on 020 7387 2032 or complete our online enquiry form.