Accountant professional negligence

Accountant professional negligence: FAQs

Individuals and businesses instruct accountants to deal with a range of financial matters. If you have employed someone as an accountant, it is only reasonable to expect that they will perform their role professionally and that they will not cause you to suffer a financial loss. Occasionally however, things can go wrong whereby you do end up suffering a financial loss as a result of the accountant’s negligence. So, what action can be taken? What is accountant professional negligence?

I have received poor service from an accountant. Can I make a claim?

In most cases, receiving poor service from your accountant is not enough to mean that the accountant was negligent. However, if the accountant is regulated by the Association of Certified Chartered Accountants (ACCA) or the Institute of Chartered Accountants in England and Wales (ICAEW), you may be able to make a complaint.

Can I sue my accountant?

As with all professional negligence claims, there are three elements that make up a successful claim. You must be able to show all three elements; therefore evidence is essential. 

1. An established duty of care

The accountant has a contractual liability towards you and a duty of care in negligence. The duties of the accountant will however primarily depend upon the agreement between them and you.

2. A breach of that duty

The accountant must have done something (or failed to do something) in breach of that duty of care. This will be conduct below the standard that would reasonably be expected of an accountant.

3. A loss caused by the accountant’s negligence.

In order to bring a claim against your accountant, you need to be able to show that their negligence caused you to suffer a financial loss.

Common types of accountant professional negligence

As an accountant’s role is broad, there are various examples of the types of negligence we might see. These include:

  • Failure to file tax returns on time
  • Incorrect share sale valuations
  • Negligent tax advice
  • Insolvency liabilities
  • Failure to detect fraud following an audit
  • Calculating PAYE correctly

How much is my claim worth?

This will depend on the circumstances of your case. A professional negligence claim is usually for damages to compensate you for the loss you have suffered and to put you back into the position you would have been in had the accountant acted reasonably in the first place.

In the recent case of Manchester Building Society v Grant Thornton UK LLP, the Court of Appeal decided that the defendant’s negligence had caused the claimant’s loss. However, the Court held that the defendant had not actually assumed responsibility for the claimant’s losses. Therefore, the claimant was not able to recover this as damages. This is because the defendant had been retained to advise on how business activities should be treated in the accounts. They were not responsible for the financial consequences of the claimant’s business activities.

Are there any time limits for bringing a claim?

There are strict time limits that apply if you wish to bring a professional negligence claim against an accountant. That time limit (“limitation“) is usually six years from the date of the negligence. There are, however, some exceptions and we would urge you to act as soon as you become aware of any potential negligence.

Do I need to go to court?

Not all professional negligence claims go to court. Indeed, court proceedings should be seen as a last resort and avoided wherever possible.

Many claims are resolved by negotiation and/or mediation. There is a Pre-Action Protocol which sets out a procedure for such claims to follow. Firstly, the claimant sends a letter of claim to the accountant, setting out the case against them. The accountant then has opportunity to respond, setting out their position. This can often set the wheels in motion to start discussing a settlement.

If you think your accountant has been negligent then you need to act as soon as possible. Our experienced professional negligence team is here to help. Call us today on 0800 988 7756 for a FREE no obligation discussion.


Where do we draw the line?

Boundary disputes and how to resolve them

Boundary disputes arising between neighbours are very common and can escalate unreasonably, often resulting in unnecessary costs which can spiral out of control.

A boundary issue can often be used as a ‘weapon’ when neighbours have had a falling out over something. Further, people’s actions can sometimes be disproportinate to the size and value of the land in dispute. A minor dispute can therefore quickly escalate and before you know it, you are faced with, or rush into, legal action.

So, where do we draw the line?

Love thy neighbour

Of course, we cannot choose our neighbours. Nevertheless, many of us will have the same neighbours for many years. Therefore the common sense approach is to try and reach an agreement with your neighbour, in order to resolve the issue amicably.

Talk to your neighbour; face to face if you can, and make a note of anything that has been agreed. If you feel uncomfortable approaching them then write down your concerns and send it to your neighbour instead. Or perhaps get a mutual friend to contact them on your behalf.

More often than not, the best policy is to find a compromise in order to maintain a good relationship with your neighbour. For example, sharing the costs for maintaining a fence or replacing a fence panel. Remember that you are neighbours and have to live next door to one another. Reaching an amicable agreement will cause far less stress and certainly be a lot less costly as well.

Evidence

Establishing the correct boundary and its positioning can be a minefield. These things are not always clear-cut, not to mention that boundary locations may vary over time. So where can we find evidence of where the true boundary lies and who owns the boundary structure (i.e. the fence, hedge or wall along the boundary).

Title plans or plans within the historic deeds may show general boundaries and some registers may also refer to the boundary in question. However not all titles/documents at the Land Registry provide the information you may be looking for. For example, the red line on the Land Registry title plan does not define the exact legal boundary. It merely gives an indication of the general location of the boundary. Further, not all title documents will indicate who has ownership of which wall or fence. You may find that looking at the title documents relating to your neighbour’s property may provide information not necessarily covered in yours.

There is also the availability of online resources such as Google Earth and Google Street View to assist with trying to obtain evidence.

Another option would be to appoint an expert surveyor to conduct a site visit and produce a report, giving their opinion on the correct boundary location. The surveyor will base this on the information they are given and what they observe on site.

Get some help

Sometimes discussions with your neighbour are not successful, and matters may reach an impasse between you. If this happens, there are various options for resolving the issue. We recommend seeking independent legal advice at the earliest opportunity.

A solicitor’s letter setting out the facts and possible implications if the matter was to escalate to Court often works to focus the parties’ minds. A solicitor will also advise you on the various methods of dispute resolution. For example, mediation can be a very successful method of resolving a boundary dispute. Court proceedings should be seen as a last resort and should be avoided wherever possible.

Our expert property disputes team can help if you have a boundary issue. If you have a boundary dispute, call us today on 0800 988 7756 for a free initial discussion.