Accountant negligence occurs when an accountant breaches their professional duty of care by acting below the expected standard. When there’s significant financial loss for a client, it allows them to start a claim for compensation. Examples include missing tax deadlines, providing incorrect financial advice or failing to identify fraud. All of these are considered negligent acts from accountants, making them liable for a claim.
This guide will advise you on how to prove accountant negligence, so you know when the appropriate time is to consider contacting solicitors and making a claim. Continue reading to learn more about the law surrounding negligent accountants.
Table of Contents
Proving Account Negligence
Duty of Care
Before you can consider starting a claim, you need to establish a duty of care owed to you from the accountant. When you hire an accountant, they have established an accountant-client relationship with you, which can be proven through an agreement letter that shows the scope of work and the services they’re giving you. A duty of care arises when a professional provides services or advice that a client relies upon, such as investment advice.
Breach of Duty
You need to demonstrate that the accountant failed to act as a reasonably competent professional, such as missing tax deadlines, giving poor tax advice or making errors in company valuations. All of these can lead to you suffering from financial hardship, as it risks you losing an unnecessary amount of money. Proving the accountant was aware of the deadline but failed to act can give you a significant case to build from.
Causation
Professional negligence solicitors can help you with your claim if you establish causation and loss. This requires you to prove that the financial loss was a direct result of the breach of duty, such as misleading advice or a missed deadline. It needs to be decided whether the loss would have occurred “but for” the accountant’s mistake, often supported by evidence that a reasonably competent accountant would not have done it.
Evidence
Employment disputes, contract breaches or money claims will all need evidence. You need to have an effective approach to collecting all of the required documents, so you can plan what you need for each stage of the claim. You can collect evidence like contracts or emails between you and the accountant, which should be organised chronologically to build a clear case. When you don’t have the appropriate evidence, your accountant can claim that the negligence never occurred and you could lose out on compensation.
Testimonies
To prove that your accountant was negligent, you can hire another one to compare their actions as this can help you to prove if malpractice occurred. It allows you to show that a competent professional could have done the work to a high standard, which proves that a breach of duty did occur and a compensation claim can be started. Without this part of the process, it can be tricky to prove that your accountant breached their duty of care since you haven’t found out if another professional would have done the same or not.