Has anyone ever sued an accountant ?

[hoggs]

As above for not presenting accounts for a ltd company on time and also the vat was not done on time . ending up with way out estimated bills and one hell of a lot of hassle and never ending waiting on the end of the phone to companies house and vat etc. just wondering if its worth the bother?

 

[thewalrus]

Are they chartered accountants?
You could contact the institute of accountants?

 

[wasted years]

Any costs associated with not getting VAT done should be borne by them anyway if that is their job.
First step is to change accountant, that usually brings people to their milk.

 

[renewablejohn]

As above for not presenting accounts for a ltd company on time and also the vat was not done on time . ending up with way out estimated bills and one hell of a lot of hassle and never ending waiting on the end of the phone to companies house and vat etc. just wondering if its worth the bother?

Just change your accountant. We ended up with over £1000 worth of late filing penalties on two ltd companies. We asked the chartered accountants to pay the fines due to there incompetence they refused. We then offset there accounts bill against the penalty charges. This failed as they took the companies to court for non payment and won despite the clear case of there negligence of failing to submit the accounts on time. Final solution was to wind up both companies, needless to say they did not get paid

 

[renewablejohn]

Are they chartered accountants?
You could contact the institute of accountants?

Complete waste of time the Institute is only there to protect its members and will do everything in its powers to take there side. There attitude was there members have no duty to file anything on a timely basis the duty to file on time is the sole responsibility of the directors of the company. Very shocking and disappointing.

 

[Danllan]

Appalled to read the above... yes you can sue an accountant. Always best to make sure that any professional belongs to a recognised professional body. However, you are where you are, and you are in a strong position. All services provided must be to a 'reasonable' standard and professionals can and should be held to a higher standard. It is entirely reasonable to expect a competent accountant to do all things necessary and to do them on time, and entirely reasonable for you not to be out of pocket due to the incompetence of others.

First, remove all of your business / books from them and place these in the hands of a competent firm (preferably members of a professional body); second, write a letter to the first lot and state clearly and politely why you have chosen to move your business, what their negligence has cost you and what you expect in return.

If they don't come back to you favourably, write a more stern letter and tell them that you are being reasonable and will only take a more formal course if forced to.

If that gets nowhere, write formally, stating that this is the last chance you will give them before resorting to the Courts.

By following this course of action you are doing everything that the Courts require of you before bringing matters to them. You will be seen as the one coming with 'clean hands' (a relevant legal phrase since it is a matte of and in Equity) which always pleases the Judges. Most dodgy types bank on the fact that most people give up before going to Court, don't let them win! If the facts are as you have stated them, you are on the right and will not lose out in this.

 

[Princess Pooper]

yes you can sue them. You should have a letter of engagement that sets out the terms of their services to you and also what they expect from you (providing info to them, paying bills etc). Dig this out and refer to it

 

[multi power]

Is it not YOUR responsibilities to get stuff in on time. If your accountant can't do that find one who can

 

[alex04w]

In law it is the directors, and only the directors, responsibility to file accounts and annual returns on time. you can delegate the task (to an accountant), but you cannot delegate the responsibility.

As @Princess Pooper has said, if the accountant is professionally qualified (and not someone calling themselves an accountant without any qualifications, which can happen) then you should have been given a letter of engagement.

This letter will clearly set out if the accountant was to file the accounts or just prepared them and give them to you to file. The letter should also set out when the accounts were to be produced to ensure they could be filed in time.

If the accountant did not fulfil the terms of the letter of engagement, then you can sue them. Hopefully the loss to you is small enough that you can use the Small Claims Court. Alternatively you can refer the accountant to their professional body. Contrary to popular opinion (already expressed above) the professional body does not side with their member. They will look at the letter of engagement and whether or not it was fulfilled.

@hoggs As a precursor to going to the professional body, write to the accountants and ask for the name and address of the professional body (even if you know it). It puts them on notice of your intentions and may make them more amenable to a settlement to prevent a referral to their professional body.

In the same letter as you ask for the name and address of their professional body, also ask for the name, address and policy number of their professional indemnity insurer so that you can put them on notice of your claim. They will run a mile from this and will definitely try and reach a settlement with you.

All the best with the claim.

 

[renewablejohn]

In law it is the directors, and only the directors, responsibility to file accounts and annual returns on time. you can delegate the task (to an accountant), but you cannot delegate the responsibility.

As @Princess Pooper has said, if the accountant is professionally qualified (and not someone calling themselves an accountant without any qualifications, which can happen) then you should have been given a letter of engagement.

This letter will clearly set out if the accountant was to file the accounts or just prepared them and give them to you to file. The letter should also set out when the accounts were to be produced to ensure they could be filed in time.

If the accountant did not fulfil the terms of the letter of engagement, then you can sue them. Hopefully the loss to you is small enough that you can use the Small Claims Court. Alternatively you can refer the accountant to their professional body. Contrary to popular opinion (already expressed above) the professional body does not side with their member. They will look at the letter of engagement and whether or not it was fulfilled.

@hoggs As a precursor to going to the professional body, write to the accountants and ask for the name and address of the professional body (even if you know it). It puts them on notice of your intentions and may make them more amenable to a settlement to prevent a referral to their professional body.

In the same letter as you ask for the name and address of their professional body, also ask for the name, address and policy number of their professional indemnity insurer so that you can put them on notice of your claim. They will run a mile from this and will definitely try and reach a settlement with you.

All the best with the claim.

You have very rose tinted spectacles unfortunately in my experience following exactly the route you propose they did not run a mile but carried on with recovery through the courts supported by there professional body. May have been a different outcome if the companies where represented by a barrister but as a LIP the odds are stacked against you. Cost of a barrister would have been 3 times the amount of the claim.

 

[Danllan]

In law it is the directors, and only the directors, responsibility to file accounts and annual returns on time. you can delegate the task (to an accountant), but you cannot delegate the responsibility.

A good point, it is the directors' responsibility; however, if you have in good faith entrusted the matter to an accountant and that accountant has not acted as required and agreed, despite the directors having ultimate responsibility for this, HMRC etc. are allowed to and will exercise discretion as to the actions they take and the timescale of those actions. In my experience, the fact that a matter is sub-j' does mitigate to a great extent, if not fully.

There are some tax officials who are genuinely unpleasant and unhelpful, but most are pretty decent people and, if you are not playing the system, they will do what they can to help you. But that is the point, be entirely straight and open - they have a pretty good nose for b.s., and if they think you are being honest they will be fine. It isn't their job to turn the screws on good people who have had a bit of bad luck.

 

[Pennine Ploughing]

accountants seem to be a good profession to be in, as they charge you a bloody good rate, a rate that no farmers ever want to pay,
yet the accountant is very rarely held accountable for their work,
and seems that the business they are working for (is you) is the one that carries the can

 

[Ali]

Accountants are scum of the earth.
Don't waste your time trying to hold them to task. It won't work.
They stick together like glue and you will never get them to be held responsible.

 

[Kidds]

Accountants are scum of the earth.
Don't waste your time trying to hold them to task. It won't work.
They stick together like glue and you will never get them to be held responsible.

I wouldn't say they were scum but they are certainly as slippery as they come.
Agree with the rest of your post mind.

 

[kill]

I wouldn't say they were scum but they are certainly as slippery as they come.
Agree with the rest of your post mind.

It's going to be a job to find any solicitor willing to sue an accountant as I would be almost certain that problems will appear re the Free Mason's as both parties will almost certainly be members and this will interfere with proceeding either known or unknown . Seen it happen more than once.

 

[alex04w]

You have very rose tinted spectacles.

No. I am an accountant and I know how the system works. The professional body does not close ranks with its members when a complaint is made. To prove this, I am waiting to be called to testify at a disclipinary tribunal against another accountant for professional misconduct. I cannot comment further on your case as I know nothing about it

A good point, it is the directors' responsibility; however, if you have in good faith entrusted the matter to an accountant and that accountant has not acted as required and agreed, despite the directors having ultimate responsibility for this, HMRC etc. are allowed to and will exercise discretion as to the actions they take and the timescale of those actions. In my experience, the fact that a matter is sub-j' does mitigate to a great extent, if not fully.

There are some tax officials who are genuinely unpleasant and unhelpful, but most are pretty decent people and, if you are not playing the system, they will do what they can to help you. But that is the point, be entirely straight and open - they have a pretty good nose for b.s., and if they think you are being honest they will be fine. It isn't their job to turn the screws on good people who have had a bit of bad luck.

There are two aspects here. In law there is no defence of 'good faith'. In for example a director disqualification hearing the Court will not entertain this defence. You may have asked an accountant to file the accounts but you are legally responsible if they dont.

The other aspect is HMRC. They will respond to such a defence. There are some cases on going at present where clients gave money to an accountant to settle their tax affairs. The accountant is presently being investigated for alleged fraud as the money was not paid to HMRC and cannot be found! One client was bankrupted, but once he proved he had paid the money to his accountant, HMRC did not object to the rescission of the bankruptcy, even though from HMRCs point of view there is still a debt outstanding.

Accountants are scum of the earth.
Don't waste your time trying to hold them to task. It won't work.
They stick together like glue and you will never get them to be held responsible.

Sorry, but accountants are no different to any other profession. Some are bad. Many are good. You cannot condemn us all as being bad.

 

[Danllan]

...There are two aspects here. In law there is no defence of 'good faith'. In for example a director disqualification hearing the Court will not entertain this defence. You may have asked an accountant to file the accounts but you are legally responsible if they dont.

The other aspect is HMRC. They will respond to such a defence. There are some cases on going at present where clients gave money to an accountant to settle their tax affairs. The accountant is presently being investigated for alleged fraud as the money was not paid to HMRC and cannot be found! One client was bankrupted, but once he proved he had paid the money to his accountant, HMRC did not object to the rescission of the bankruptcy, even though from HMRCs point of view there is still a debt outstanding...

A good post.

Yet I didn't write that it was a 'defence' but, rather, that the facts as explained could mitigate the matter so as to allow HMRC to exercise their discretion, rather than to carry on as they would ordinarily, should there be no reasonable explanation for the failure to file.

With regard to your final point, yes. I have know some Barristers who were decent people but, worryingly, were very poor advocates, I have known of others who were perfectly competent lawyers but who were not honest - either case is bad for the client and profession. I have also come across some 'book-keepers' who could have run rings around people inside PWC, and some fully Chartered accountants who I wouldn't trust the competence of to do my VAT, and still others whose honesty would make me reluctant to entrust them with my PTA's petty cash. Nonetheless, I stand by one of the first points I made in my original post, that if one is employing a 'professional', it is better to employ one that is a member of a recognised professional body. For Barristers and Solicitors these are only, respectively, the Bar Council and the Law Society. In the UK there are, I think, half a dozen bodies for accountants (more / less?), all of which do a good job; despite my mentioning of good book-keepers above, I would still advise using a member of one of these org's.

 

[bar718]

Yes you can sue an accountant as stated above , we did and got what we wanted but it's a long drawn out process and can get very nerve racking when you get to the costs of QC's etc . Once you have stated what you intend to do in theory they will hand the case over to there insurance company and professional body who will fight you all the way , even if as in our case the costs eventually outweighed the original claim .As we won they paid the costs though . But also be aware that even a win of only £5 is classed as a win by your solicitor.

 

[renewablejohn]

No. I am an accountant and I know how the system works. The professional body does not close ranks with its members when a complaint is made. To prove this, I am waiting to be called to testify at a disclipinary tribunal against another accountant for professional misconduct. I cannot comment further on your case as I know nothing about it

.

Well as a fellow accountant I think you have very rose tinted spectacles. It has always been a closed shop dictated by the big accountancy firms and quite frankly I am ashamed at times trying to justify some of there actions. Thankfully I managed to get out of the cut throat antics at the age of 40.