Lawyers are predicting a flood of claims
Lawyers gearing up to handle credit crunch claims against accountants say the issue is now a matter of ‘how many’ and not ‘if’ claims will come
Writing in Accountancy Age, lawyers from Barlow Lyde & Gilbert
make clear the profession is facing a flood of claims. ‘Given market volatility,
it is probably no longer a question of whether claims will be made against
accountants, but how many,’ wrote BLG partner Andrew Howell and associate
director Andrew Forsyth.
‘The difficult accounting and auditing judgments made in the current
environment are likely to be subject to close judicial scrutiny in a court
room.’
The lawyers said significant revaluations of businesses in the wake of the
sub-prime crisis and credit crunch would attract the attention of shareholders
who have lost out, and potential litigation risk extended beyond audit work.
‘The current turbulence will require considerable care in relation to
determining appropriate assumptions and identifying sensitivities, since recent
past experience may no longer be such a reliable guide,’ the lawyers write.