CIMA in advice row

CIMA has been threatened with a #200,000 legal action by a member who claims the institute failed to give him proper advice and support after he lost his job when he raised concerns about an apparent discrepancy in his employer’s accounts.

Eddie Cairns was sacked from his job as a contract accountant with Enterprise Ayrshire in 1993 after making allegations to his superiors that a #187,000 European grant cheque had not been banked using the correct procedure.

Although CIMA, in a letter to the Scottish Office in 1994, described Cairns’ action as ‘entirely correct’, a subsequent police investigation cleared Enterprise Ayrshire of any wrongdoing.

Cairns says the ensuing publicity has wrecked his career and, in a draft writ drawn up under Scottish law and sent to CIMA earlier this month, he claimed damages for ‘loss, injury and damage’.

CIMA secretary John Chester refused to confirm that the writ had been served and his official spokeswoman said: ‘It would be wholly inappropriate to comment at this time and the matter is with our solicitors.’

In a letter to Cairns, CIMA’s solicitor, top international law firm Allen & Overy, said the draft writ showed no arguable cause of action against CIMA. It said it had advised the institute to ‘vigorously defend any action against it’ and warned him he would have to pay CIMA’s legal costs if his case failed.

Among Cairns’ allegations is that it was CIMA’s advice to consult a solicitor about his concerns that precipitated his sacking in 1993. Allen & Overy’s letter says this was ‘prudent’ advice, adding that it could not have put Cairns at risk of breaching his employer’s confidence because ‘a solicitor is bound by rules of confidentiality and professional privilege’.

A subsequent letter from the firm last week said it saw ‘little point in continuing this intermittent debate’, concluding that it would not enter into further discussion ‘of these matters’.

Cairns told Accountancy Age: ‘CIMA says I broke confidentiality but it has abandoned any responsibility to uphold the ethical stance of accountants.’ He said the high-profile success of European Commission whistleblower Paul van Buitenen had prompted him to revive his action against CIMA.

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