The Credit Crunch and Accountancy Negligence Claims
The Credit Crunch and Accountancy Negligence Claims
Due to the economic downturn people are using the services of accountants more and more. As a consequence of this the amount of accountancy negligence claims has risen rapidly.It could well be that this is because investors may lose money during the economic bad times and they want someone to blame. Who is available to blame in this situation - their accountant, accountants are often seen as cash cows with easy access to money and therefore worth suing!Some big name accountancy firms have been sued. These include Ernst and Young as well as KPMG and PrciewaterhouseCoopers and they don't get much bigger than those firms. The current trend is that the larger firms are being sued and the smaller firms are also suffering from potential professional negligence claims all becuse their is a general idea that they must be responsible for any economic downturns.It is fact that it is much more difficult for a company to sue their accountant in the UK than it would be in the US. This is merely due to the fact that the legal threshold for proving liability is a lot higher in the UK than it is in the USA. But whilst investors are not able to sue and to take accountancy negligence claims, it is certainly true that others can sue and indeed they really do make professional negligence claims against accountants. It is not always the investors, it could be small firms or self-employed people. A few years ago it would have been inconceivable that they would have taken an accountancy negligence claim. Now it is becoming much more of a reality and something that really could happen and may happen more regularly in the future.This does create unease amongst accountancy firms whom worry about what they can and cannot be blamed for, especially when a business they audit collapses. They are also concerned that this could happen even if they are only partially to blame. The Government has been repeatedly asked by accountancy firms who undertake auditing to limit liabilities and whilst this has not been successful yet, it will be interesting to see if this does indeed happen or will accountants simply have to make friends with specialist professional negligence solicitors.