sdGetting to the point where you have found out your accountant has made multiple errors and a whole mess of your finances, whether personal or business, is a really stressful situation, regardless. But there is a fine line between mistakes and complete and utter negligence in the eyes of the law, unfortunately. Not every error qualifies as a legal breach that is sue-worthy. To win an accountant negligence claim, you have to move beyond “I’m unhappy” with their service to “they completely failed me”
But what are the kinds of mistakes that warrant a failure in the eyes of the law? Let’s get into it.
Reasonable Competence Test
The law doesn’t require accountants to be perfect or to find every single penny. It requires them to be reasonably competent. Which means they are allowed to make some mistakes here and there, as it’s human nature, regardless of whether it’s your job. A strong case exists if their error is something that no other accountant would have reasonably made, so it could be inexcusable.
A weak case would look like suing your accountant for not advising you to make the right financial decision, while a strong case looks like your accountant missed a standard filing deadline, resulting in constant penalties or failed to apply for a well-known tax relief.
Proving “But For” Causation
This is the hurdle where many claims stumble. You must prove that but for the accountant’s mistake, you would not have suffered the loss.
If you would have owed the tax anyway, the accountant isn’t liable for the tax bill itself—only for the penalties and interest caused by the delay.
Example: If an accountant fails to tell you about a £10,000 tax bill, you still owe that £10,000 to the government. You can’t sue the accountant for the £10,000 because you owed it regardless. However, you can sue them for the £1,500 in late fees and interest their silence caused.
The Evidence Trail
A strong case is built on documentation. If your “proof” is a verbal conversation from three years ago with no written follow-up, your case is weak.
Indicators of a strong case include: A clear document showing the accountant agreed to handle the specific task they botched, evidence that you provided them with the necessary information on time and or clear records of the errors made in ledgers, tax returns, or financial statements.
Contributory Negligence: Did You Help?
The defense will look for ways to blame you. If you provided your records late, gave them inaccurate data, or ignored their requests for information, your “strong” case might be weakened. The court can reduce your payout by the percentage they deem you were “at fault” for the situation.
Key Question: Did you give your accountant everything they needed to succeed? If the answer is “yes” and they still failed, your position is significantly stronger.
Final Thoughts
Before you call a lawyer such as Been Let Down, try to gather your Engagement Letter and the Notice of Penalty or error. Having these two documents ready will allow a solicitor to give you a “Yes/No” answer much faster.