Accountants in personal liability scare
Accountants could face increased personal liability claims if efforts to overturn Court of Appeal ruling with a petition to the House of Lords fail.
A ruling by the Court of Appeal ruled that employees offering advice on behalf of their employers still have a personal duty of care to clients even after the firm has ceased to trade.
Potentially the case has serious consequences for many professions and raises concerns about the level of insurance provided to advisers by their employers.A decision on whether the House of Lords will allow an appeal is not expected for some months but lawyers involved in the case are convinced professionals are now more vulnerable to claims for damages than ever.
The case involved John Babb, a chartered surveyor from Plymouth, who was sued over a mortgage valuation he provided in 1992 on behalf of Clive Walker Associates which went out of business in 1994. The claim against Babb was not brought until 1999.
Peter Maguire, a partner with law firm Cameron McKenna, who acted for Babb, said: ‘If the judgement of the Court of Appeal stands it will leave all employees who provide specialist advice – whether professional or otherwise exposed to personal liability.’
ACCA said this week that it believed its members were protected but said there was a concern that accountants in the same circumstances as Babb could be at risk.
John Davies, head of business law at ACCA, said the association’s members were covered by professional indemnity insurance and fidelity insurance against the dishonesty by partners or employees.
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Accountants face fresh liability fears