Accountants Negligence

Accountant Negligence Claims Expert Solicitors

Businesses and individuals can suffer major losses due to an accountant’s negligent advice or errors. We help clients across England and Wales recover those losses and hold negligent accountants accountable.

If your accountant’s negligence has caused you significant financial loss, for example, a botched audit that failed to detect fraud, or incorrect tax advice leading to heavy penalties you may be entitled to claim substantial compensation. Our team of expert professional negligence solicitors has extensive experience with high-value claims against accountants, including complex cases in the High Court. We offer clear, practical guidance to businesses and individuals who have been let down by their accountants, and we operate on a national basis. Free initial advice is available to assess your case, and in appropriate circumstances we may be able to represent you on a no win, no fee basis (Conditional Fee Agreement).

What Is Accountant Negligence?

Accountants, like all professionals, owe their clients a duty of care. This means your accountant must perform their services to a reasonable professional standard with due care and skill. Accountant negligence occurs when the accountant breaches that duty by providing sub-standard services or advice, and you suffer a financial loss as a direct result. In simpler terms, it’s not enough that the accountant made a mistake it must be a serious error that no reasonably competent accountant should have made, and it must cause you quantifiable loss. Many people experience inadequate or poor service from advisors, but not every mistake is negligent in the legal sense. For a successful claim, you generally need to prove:

Breach of Duty

That your accountant failed to meet the standard of a reasonably skilled accountant (e. g. giving wrong advice or failing to do something they should have).

Causation

That this failure caused you harm, i. e. financial loss, which would not have occurred otherwise.

Loss

That you incurred actual financial loss (or in some cases, loss of a chance or opportunity) as a result.

Importantly, disappointment in the service or minor errors with no real loss won’t qualify. For example, if an accountant was slow in completing your accounts and caused frustration but no financial damage, you likely don’t have a negligence claim (though you could consider a complaint to their regulator). However, if their delay or error did lead to a tangible monetary loss, say, a missed tax deadline and a fine, then the elements of negligence may be present.

Examples of Accountant Negligence

Accounting negligence can arise in a variety of scenarios. When accountants fail to meet the standards of their profession, the consequences can be costly for clients. Below are some common examples of negligent errors by accountants, explained in terms that any business owner or individual can understand:

Incorrect Tax Advice or Filings

One common example is when an accountant provides incorrect tax advice or mishandles tax filings. If they miscalculate your tax liabilities or overlook important tax rules, you could end up underpaying or overpaying tax and facing HM Revenue & Customs (HMRC) penalties or interest charges . In some cases, an accountant might even advise a course of action that crosses into unlawful tax evasion instead of legal tax avoidance, leaving you at risk of hefty fines or investigations . Clients rely on their accountants to get these calculations and compliance matters right, so serious errors in this area are strong grounds for a negligence claim.

Missed Deadlines

Deadlines are critical in accounting, and missing them can have immediate financial consequences. For example, failing to file a tax return or annual accounts on time will usually result in automatic fines and interest charges from HMRC . Business owners depend on their accountants to keep track of these obligations; if your accountant’s failure to submit paperwork on time caused you to incur penalties, that delay could be considered negligence . Meeting statutory filing dates is a basic duty for accountants, so oversights in this area are often clear-cut breaches of their professional duty.

Audit Failures and Undetected Fraud

Accountants and auditors are expected to catch red flags in financial records – when they don’t, the results can be disastrous. Negligently conducting an audit or reviewing accounts and failing to detect major errors or even fraud means serious irregularities go unnoticed . For instance, an auditor might sign off on financial statements that wildly misrepresent a company’s true financial position; if stakeholders rely on those faulty statements and later discover a fraud or large discrepancy, the negligent accountant could be held responsible for the resulting losses. Clients trust that an accountant’s review will be thorough, so missing obvious signs of trouble is a classic form of professional negligence.

Misvaluation of Assets or Business

Another example is when an accountant provides a completely incorrect valuation of a business, company shares, or significant assets. A negligent overvaluation or undervaluation can cause serious financial harm – for instance, a buyer might overpay for a company based on the accountant’s inflated figures, or a seller might accept too low a price due to an underestimation of value . Such misvaluation errors can derail acquisitions, investments, or sales, directly leading to losses. Valuing businesses and assets is complex, but accountants are expected to use reasonable care and sound methods; a grossly inaccurate valuation that falls below professional standards may be deemed negligent.

Errors in Accounts Preparation

Basic mistakes during the preparation of accounts can also amount to negligence. Simple errors like data entry slip-ups, double-counting transactions, or failing to properly reconcile accounts will produce inaccurate financial statements. If your accountant’s carelessness leads to incorrect figures, you could be misled about your business’s true financial position . Serious misreporting might result in poor business decisions or misinform investors, and any losses stemming from such mistakes can be attributed to the accountant’s negligence. Accountants should have quality controls to prevent these errors – when they don’t and a major mistake slips through, it shows a lack of reasonable care.

Payroll Mistakes

Many businesses rely on accountants to manage their payroll and PAYE (Pay As You Earn) tax filings for employees. If an accountant processes payroll incorrectly, it can result in staff being underpaid or overpaid and the wrong amounts of tax being deducted. Such mistakes often lead to additional costs – for example, HMRC could impose penalties for incorrect payroll tax submissions, or the business might have to compensate employees for payment errors . Negligent payroll management not only breaches the trust placed in the accountant but can also create significant financial and legal headaches for a company.

Failure to Follow Instructions or Regulations

Accountants should always follow their client’s instructions and adhere to professional rules. Negligence can occur if an accountant ignores specific instructions you gave – for instance, if you asked for a particular tax-saving strategy to be implemented but they failed to do so, and you ended up paying more tax as a result. Similarly, not following industry regulations or ethical obligations can be negligent; a clear example would be breaching confidentiality or data protection requirements, which could cause financial or reputational harm to the client. When an accountant deviates from what was agreed or violates their professional duties and it leads to a loss, it amounts to a failure in their duty of care .

Failure to Warn About Insolvency Risks

Accountants are often in a position to advise businesses on looming financial risks like insolvency. If an accountant realizes (or should realize) that a company is effectively insolvent but fails to warn the owners or directors, that omission can have grave consequences . For example, continuing to trade while insolvent can lead to wrongful trading claims or even personal liability for the directors – outcomes which a diligent accountant should help the client avoid . Negligently failing to alert a client to such critical red flags breaches the accountant’s duty to act with reasonable care and can leave them liable for the fallout.

Each of these scenarios could potentially give rise to a professional negligence claim against the accountant. If you believe your accountant’s mistakes have caused you financial harm, it’s advisable to seek guidance from a specialist accountant negligence solicitor on how to protect your interests .

High-Value Claims and Why Specialist Solicitors Matter

Negligence claims against accountants often involve complex financial issues and, in high value cases, determined opposition from the accountant’s insurers. Keep in mind that most accountants carry Professional Indemnity Insurance, meaning any claim for substantial damages will typically be handled (and defended) by their insurance company’s lawyers. For claims above £100,000 which proceed on the High Court multi-track you need experienced professional negligence solicitors on your side to level the playing field.

Our firm has a proven track record in handling high-value professional negligence claims, including actions against accountants, auditors and other financial professionals. We understand the strategies insurers use to try and discredit claims or limit payouts. We are members of the Professional Negligence Lawyers Association and seasoned litigators who have dealt with some of the most complex negligence cases. We can quickly assemble the right experts (forensic accountants, tax specialists, etc.) to analysis your case and bolster the evidence that the accountant breached their duty.

Why choose us? We provide a truly bespoke service for serious claims, we know that your business or personal finances may be on the line. Our solicitors will guide you through each stage of the process, from initial evidence-gathering and pre-action correspondence to court proceedings if needed.

Can I Sue My Accountant and What Is the Process?

Yes, if your accountant’s mistakes meet the negligence criteria discussed above, you can sue your accountant to recover losses. The typical process for a professional negligence claim is as follows:

Initial Consultation and Review: We will start with a free initial assessment of your case. This involves discussing what happened, reviewing key documents, and determining if the basic grounds for a claim exist (duty, breach, loss). If we believe your case has merit and is economically viable (given the losses exceed £100k, it likely will be), we can formally commence the claims process.

Pre-Action Protocol: Before issuing any court proceedings, professional negligence claims are expected to follow the Professional Negligence Pre-Action Protocol. This is essentially a structured exchange of information aimed at resolving disputes early. We will send a detailed Letter of Claim to the accountant setting out your allegations of negligence and the losses suffered. The accountant (or more usually, their insurer-appointed solicitors) should respond with a Letter of Response. During this stage, there may be an opportunity for settlement negotiations or mediation – in fact, since the Protocol’s introduction, the majority of negligence claims settle at this stage without needing to go to court.

Our solicitors are skilled negotiators and will strive to secure a fair settlement that covers your losses and legal costs.

Court Proceedings: If the other side denies liability or no acceptable settlement is reached, we will proceed to issue a claim in court. High-value accountant negligence claims will usually be issued in the High Court. Our team will handle all aspects of litigation drafting pleadings, gathering expert evidence (for example, an independent accountant’s report on what the negligent accountant did wrong), and representing you robustly at trial if it comes to that. Rest assured, only a minority of cases actually end up in a full trial; but if yours does, you will have a dedicated solicitor (and barrister, if required) fighting your corner.

Throughout this process, we keep you informed and in control. We know litigation can be daunting, but we make sure to explain each step in plain English and lay out your options. Our goal is always to resolve your claim as efficiently as possible while maximizing your recovery. In many cases, the mere fact that you have engaged specialist lawyers and are prepared to go to court will encourage the defendant to come to the table with a serious settlement offer.

Time Limits for Negligence Claims Against Accountants

In England and Wales, strict time limits (limitation periods) apply to professional negligence claims. Generally, you have six years from the date of the negligent act or omission to issue a claim in court. If the problem was not discovered immediately, an alternative limitation period allows three years from the date you first discovered the negligence (or could reasonably have discovered it). This rule (under section 14A of the Limitation Act 1980) can extend the deadline if, for example, your accountant gave you wrong tax advice years ago but you only realised the error when an HMRC investigation or penalty occurred later. This is complex and needs careful analysis, so do not assume you are entitled to its benefit. Act quickly and seek advice.

However, there is an absolute 15-year “longstop” from the date of the accountant’s mistake, beyond which you cannot bring a claim regardless of when you found out. In other words, if the negligence happened over 15 years ago, the door to a claim is closed.

Because of these time limits, it is crucial not to delay seeking legal advice. Calculating limitation can be complex, especially in cases involving ongoing accountancy work or latent errors that surface much later. If you suspect negligence, contact us as soon as possible so we can evaluate the timeline. We will ensure that your claim is filed within the required period and that your rights are protected. Waiting too long could mean losing your chance to recover substantial sums that you’re entitled to.

Where negligent tax or financial advice is only uncovered after losses emerge, section 14A may extend the limitation period. See our article on date of knowledge and latent damage in professional negligence claims for further guidance.

“No Win, No Fee” and Funding Options

We understand that after suffering a significant financial loss, claimants may worry about legal costs. To ease this burden, we offer a free initial consultation to discuss your case. If we advise that your claim has good prospects, we will also talk through the possible funding options. In some circumstances, we can handle accountant negligence claims under a Conditional Fee Agreement (CFA), commonly known as a “no win, no fee” arrangement. This means you would only pay our fees if the case is successful (usually, most of those fees would then be recoverable from the defendant’s side). Whether a CFA is suitable depends on the specifics of your case, and we assess this on a case-by-case basis.

If a no win, no fee agreement isn’t available or preferable, there are other funding routes to consider. You might have legal expenses coverage under an existing insurance policy for example, many business insurance packages or even home insurance policies include cover for legal claims (often called Legal Expenses Insurance). We’ll help you review any insurance you have to see if it can fund the claim. We can also advise on third-party litigation funding for very high-value cases, or payment plans if needed. Our priority is to find a solution that enables you to pursue justice without undue financial stress. We are transparent about costs from the outset, and if we do take your case on, we’ll work efficiently to keep costs proportionate.

(Please note: “No win, no fee” CFAs are offered subject to a satisfactory merits and viability assessment. We will discuss all terms and conditions with you in advance.)

Frequently Asked Questions

Below we answer some common questions clients have about negligence claims against accountants. Should you have any additional queries, please contact our specialist team.

What constitutes accountant negligence?

Accountant negligence occurs when an accountant’s actions fall below the standard expected from a reasonably competent accountant, causing you financial loss. Not every mistake or oversight is classed as negligence; there must be a significant breach of professional duty leading directly to measurable damage. Examples include missed filing deadlines resulting in fines, incorrect tax advice leading to penalties, or serious errors in financial statements causing financial harm.

Can I sue my accountant for a mistake?

Yes, provided the accountant’s mistake is substantial and caused you measurable financial loss. Minor errors without significant consequences do not usually qualify. A valid negligence claim requires proof that the accountant breached their professional duty and this breach directly resulted in financial losses. We will carefully assess your circumstances to advise whether your accountant’s mistake is actionable.

How do I know if I have a valid claim?

To establish a valid claim, you must show your accountant owed you a duty of care, breached that duty, and that this breach directly caused your financial loss. Common indicators of negligence include clear errors such as incorrect advice, missed deadlines, or incorrect audits, combined with proof of financial harm. If you are unsure, we provide a free initial consultation to evaluate your case and determine its merits.

What evidence will I need?

Strong evidence is crucial to proving accountant negligence. Key documents usually include contracts or engagement letters, relevant correspondence (emails, letters), accounts, financial statements, tax returns, penalty notices, and invoices. Additionally, independent expert evidence from another accountant is often needed to establish the standard of professional care breached by your accountant. Our solicitors will help you gather and prepare all necessary evidence.

Will I need to go to court?

Most accountant negligence claims are resolved without court proceedings. Initially, we follow the Professional Negligence Pre-Action Protocol, which encourages settlement discussions. Most cases settle at this stage through negotiation or mediation. However, if a reasonable settlement cannot be achieved, court action may become necessary. Even then, only a small proportion of claims reach a final hearing. We always strive to achieve favourable settlements promptly, but we are fully prepared to represent you in court if needed.

What compensation might I receive?

Compensation in accountant negligence claims is intended to restore your financial position to what it would have been if the negligence had not occurred. You can recover direct financial losses such as penalties, additional tax paid, lost opportunities, costs to rectify mistakes, and other consequential expenses. Interest may also be claimed on your losses. We carefully assess and quantify all your losses to ensure maximum recovery.

How long do these claims usually take?

The timeframe for accountant negligence claims varies widely. Straightforward cases often settle within a few months, but complex or disputed claims can take 12 to 18 months or more, especially if court action is required. Timing depends on various factors, including the complexity of the case, cooperation from the defendant, and the speed of settlement negotiations. We always seek to expedite matters and keep you updated on progress.

Do I need a specialist solicitor?

It is highly advisable to use a specialist professional negligence solicitor. Claims involving accountants often involve detailed financial complexities and expert evidence. Additionally, accountants are typically defended by experienced insurers’ solicitors. Having specialist legal representation helps level the playing field, ensuring your claim is properly managed, evidence is robustly prepared, and your prospects of success are maximised.

Can I claim against a deceased accountant or a closed firm?

Yes. Negligence claims usually proceed against the accountant’s professional indemnity insurance, not their personal estate. Even after retirement, death, or closure, accountants typically hold “run-off” insurance, ensuring protection remains for a number of years. We will identify and pursue the correct insurer on your behalf, ensuring your claim is properly directed and managed despite any closure or changes.

I am unhappy with my accountant but unsure if there was negligence what should I do?

If you’re uncertain whether your accountant’s actions constitute negligence, we recommend you first document exactly what occurred and its financial impact. Minor errors or dissatisfaction with service quality may be better resolved through the accountant’s internal complaints procedure or via their professional regulatory body. However, if you suspect significant financial harm due to a serious mistake, you should seek our advice immediately. We offer a confidential initial review to clarify your position and discuss your best options moving forward.

High-value professional negligence claims are a core focus of our practice, and we are accustomed to working with clients from diverse sectors and regions.

Contact Our Professional Negligence Team

If you believe you have grounds for an accountant negligence claim,and especially if your losses exceed £100,000, contact us today for a free, no-obligation chat about your options. Early legal advice can be crucial to securing the evidence and taking the right steps to protect your claim. Don’t let a negligent accountant’s mistakes jeopardise your financial future. With our expert legal support, you can recover your losses and hold the responsible party accountable. Get in touch with us now and let us help turn your situation around.