When I give talks about professional negligence issues and how to avoid claims, I comment about how much time can pass between the alleged act and the claim being made. Some people assume that all such claims are made promptly. In practice this is not always the case.

I recently became aware* of a case where an accountancy firm was sued for negligence as regards the entries they included on a client’s tax returns in the early 1990s – about 15 years ago. The alleged negligence only came to light in 1997 and there was an out of court settlement in 2001. That was not the end of the matter though as a complaint was also then made to the relevant Institute in 2002 suggesting that the individual accountant may have brought discredit on himself, the Institute and the profession. It seems to have taken a further 5 years to progress matters due to some lengthy delays in the correspondence process. Even without such delays the complaint still refers back to events of ten years earlier.

It’s a sad fact of life that professional advisers may get a rude awakening some long time after the events about which a complaint is made. This is why I encourage advisers to do all they can to minimise the prospect of professional negligence claims. And in this regard, having a good defence is not sufficient. That may enable one to avoid a successful claim but the pain and anguish of dealing with a claim in the first place is such that it’s best to do all one can to avoid them.

I have written a 10,000 word ebook drawn from my talk on How to avoid professional negligence claims, containing tips and risk management advice for accountants in practice. You can buy the book or download a summary for free here>>>

* For the avoidance of doubt, I should stress that I became aware of this case due to my possible role as an expert witness!