Accountants held accountable?

Mistral001

Sandtree said:

Jeremy535897 said:

Sandtree said:

Jeremy535897 said:

Sandtree said:

Zil4315 said:

We understand we are responsible but there is a reason why we pay accountants to deal with everything on our behalf, because we are not accountants. We specialise in what we do and they specialise in what they do. Even if we looked over everything they do, I'm not sure an error would be picked up because we don't know what we would be looking for.

We know now that we claimed wrongly but at the time, we didn't know and we didn't check. We simply trusted the government letter we received and thought we were super lucky (we are never lucky!). That was our mistake yes, but we can't help thinking that if the accountants hadn't made the mistake of not entering the cessation date on the tax return, we wouldn't be in this mess.

When determining liability the courts look at the remoteness of the cause and effect so as an easy example, a person is injured in a car accident that wasnt their fault, they get a few weeks full sick pay and then it stops. They can claim their loss of earnings from the at fault driver/their insurance. You could attempt to argue that their employer should be able to claim the sick pay back from the driver too as its their fault they had to pay wages without getting any work done but the courts have deemed that this is too remote.

From what you say the accountants do appear to have made a mistake but it feels to me to be too remote to link the mistake to the loan.

I assume you guys filled in the grant forms and/or signed them in which case it was your duty to ensure that this was done correctly and accurately. I've not seen the form but I'd be surprised that there wouldnt have been a number of red flags... "Self Employed Income Support Scheme", you arent self employed if via a LTD... no questions about the company name, number, registered address etc.

The accountants may have a token liability but it'd presumably have been cleared up in the 20/21 returns had the grant not been received. 

Your focus should be on negotiating a repayment plan for the grant if the business remains viable with the debt.

Assuming that the accountants carry professional indemnity insurance, the immediate question is more what the insurers think than what a court thinks, and they will be influenced by the amount of the claim. It makes total sense to negotiate payment terms as soon as possible (apart from anything else, you have a duty to mitigate your loss), but don't immediately write off your chances. Most genuine insurance claims are settled out of court.

There is no obligation for them to pass it to their insurers to deal with... unlike Motor or EL you cannot circumvent the party you are blaming. Even if they do pass it to their insurers what the insurer will be doing is ultimately trying to predict the outcome of litigation with an element of risk margin 

It is a condition of all PII insurance that you must immediately inform the insurer that you face a claim, otherwise the claim may not be covered. Where the amount involved is modest, the bias is towards settling. That is why the NHS pays out so much each year.

Whilst not disputing that is the case how is that relevant to the point? Just because if the accountant wants to benefit from their cover they must inform their insurers doesnt make it possible for the OP to force their accountants to claim from their insurance.

It was to correct your statement responding to my earlier post that "there is no obligation for them to pass it on to their insurers". The process has to start with advising the insurer. A discussion then takes place between the insurer and the accountant, exploring things like the quantum of a claim, and whether the accountant thinks that it is possibly a valid claim, or whether it is spurious. They reach an agreement as to how the matter will be pursued, and if the claim is not spurious, that normally leads to an offer of settlement without admission of liability.

Good points but, just on the point of not accepting resposibility.  My experience is that insurers, if they settle a claim will want to get it over and done with so that there is no come back at a later date.  So they will want to have responsibilty for the mistake established one way or the other.  Settling with no admission of responsibility for the mistake can lead to the possiblity that the case could re-open and further claims be made on the same matter at a later date.   In small claims perhaps an insurer might accept a written disclaimer regarding future claims from the aggrieved client, but evn if the aggrieved party agreed to that I think insurers still get nervous of accepting that as disclaimers have their limits.

I once paid damages myself out of my own pocket with the full knowledge of my insurers.  The insurers, in that situation, told me that I should make the payment as a "goodwill jesture" which means that I do not accept guilt.  My client was happy with that as he got his money quickly.   The amount was less than the excess on my insurance.  

Jeremy535897

Mistral001 said:

Sandtree said:

Jeremy535897 said:

Sandtree said:

Jeremy535897 said:

Sandtree said:

Zil4315 said:

We understand we are responsible but there is a reason why we pay accountants to deal with everything on our behalf, because we are not accountants. We specialise in what we do and they specialise in what they do. Even if we looked over everything they do, I'm not sure an error would be picked up because we don't know what we would be looking for.

We know now that we claimed wrongly but at the time, we didn't know and we didn't check. We simply trusted the government letter we received and thought we were super lucky (we are never lucky!). That was our mistake yes, but we can't help thinking that if the accountants hadn't made the mistake of not entering the cessation date on the tax return, we wouldn't be in this mess.

When determining liability the courts look at the remoteness of the cause and effect so as an easy example, a person is injured in a car accident that wasnt their fault, they get a few weeks full sick pay and then it stops. They can claim their loss of earnings from the at fault driver/their insurance. You could attempt to argue that their employer should be able to claim the sick pay back from the driver too as its their fault they had to pay wages without getting any work done but the courts have deemed that this is too remote.

From what you say the accountants do appear to have made a mistake but it feels to me to be too remote to link the mistake to the loan.

I assume you guys filled in the grant forms and/or signed them in which case it was your duty to ensure that this was done correctly and accurately. I've not seen the form but I'd be surprised that there wouldnt have been a number of red flags... "Self Employed Income Support Scheme", you arent self employed if via a LTD... no questions about the company name, number, registered address etc.

The accountants may have a token liability but it'd presumably have been cleared up in the 20/21 returns had the grant not been received. 

Your focus should be on negotiating a repayment plan for the grant if the business remains viable with the debt.

Assuming that the accountants carry professional indemnity insurance, the immediate question is more what the insurers think than what a court thinks, and they will be influenced by the amount of the claim. It makes total sense to negotiate payment terms as soon as possible (apart from anything else, you have a duty to mitigate your loss), but don't immediately write off your chances. Most genuine insurance claims are settled out of court.

There is no obligation for them to pass it to their insurers to deal with... unlike Motor or EL you cannot circumvent the party you are blaming. Even if they do pass it to their insurers what the insurer will be doing is ultimately trying to predict the outcome of litigation with an element of risk margin 

It is a condition of all PII insurance that you must immediately inform the insurer that you face a claim, otherwise the claim may not be covered. Where the amount involved is modest, the bias is towards settling. That is why the NHS pays out so much each year.

Whilst not disputing that is the case how is that relevant to the point? Just because if the accountant wants to benefit from their cover they must inform their insurers doesnt make it possible for the OP to force their accountants to claim from their insurance.

It was to correct your statement responding to my earlier post that "there is no obligation for them to pass it on to their insurers". The process has to start with advising the insurer. A discussion then takes place between the insurer and the accountant, exploring things like the quantum of a claim, and whether the accountant thinks that it is possibly a valid claim, or whether it is spurious. They reach an agreement as to how the matter will be pursued, and if the claim is not spurious, that normally leads to an offer of settlement without admission of liability.

Good points but, just on the point of not accepting resposibility.  My experience is that insurers, if they settle a claim will want to get it over and done with so that there is no come back at a later date.  So they will want to have responsibilty for the mistake established one way or the other.  Settling with no admission of responsibility for the mistake can lead to the possiblity that the case could re-open and further claims be made on the same matter at a later date.   In small claims perhaps an insurer might accept a written disclaimer regarding future claims from the aggrieved client, but evn if the aggrieved party agreed to that I think insurers still get nervous of accepting that as disclaimers have their limits.

I once paid damages myself out of my own pocket with the full knowledge of my insurers.  The insurers, in that situation, told me that I should make the payment as a "goodwill jesture" which means that I do not accept guilt.  My client was happy with that as he got his money quickly.   The amount was less than the excess on my insurance.  

Normally the basis of the settlement is that the claimant is paid a sum and signs away any right to pursue it further. Liability is not admitted. Your payment was not covered by the insurers anyway, as it was within the excess.

Mistral001

Jeremy535897 said:

Mistral001 said:

Sandtree said:

Jeremy535897 said:

Sandtree said:

Jeremy535897 said:

Sandtree said:

Zil4315 said:

We understand we are responsible but there is a reason why we pay accountants to deal with everything on our behalf, because we are not accountants. We specialise in what we do and they specialise in what they do. Even if we looked over everything they do, I'm not sure an error would be picked up because we don't know what we would be looking for.

We know now that we claimed wrongly but at the time, we didn't know and we didn't check. We simply trusted the government letter we received and thought we were super lucky (we are never lucky!). That was our mistake yes, but we can't help thinking that if the accountants hadn't made the mistake of not entering the cessation date on the tax return, we wouldn't be in this mess.

When determining liability the courts look at the remoteness of the cause and effect so as an easy example, a person is injured in a car accident that wasnt their fault, they get a few weeks full sick pay and then it stops. They can claim their loss of earnings from the at fault driver/their insurance. You could attempt to argue that their employer should be able to claim the sick pay back from the driver too as its their fault they had to pay wages without getting any work done but the courts have deemed that this is too remote.

From what you say the accountants do appear to have made a mistake but it feels to me to be too remote to link the mistake to the loan.

I assume you guys filled in the grant forms and/or signed them in which case it was your duty to ensure that this was done correctly and accurately. I've not seen the form but I'd be surprised that there wouldnt have been a number of red flags... "Self Employed Income Support Scheme", you arent self employed if via a LTD... no questions about the company name, number, registered address etc.

The accountants may have a token liability but it'd presumably have been cleared up in the 20/21 returns had the grant not been received. 

Your focus should be on negotiating a repayment plan for the grant if the business remains viable with the debt.

Assuming that the accountants carry professional indemnity insurance, the immediate question is more what the insurers think than what a court thinks, and they will be influenced by the amount of the claim. It makes total sense to negotiate payment terms as soon as possible (apart from anything else, you have a duty to mitigate your loss), but don't immediately write off your chances. Most genuine insurance claims are settled out of court.

There is no obligation for them to pass it to their insurers to deal with... unlike Motor or EL you cannot circumvent the party you are blaming. Even if they do pass it to their insurers what the insurer will be doing is ultimately trying to predict the outcome of litigation with an element of risk margin 

It is a condition of all PII insurance that you must immediately inform the insurer that you face a claim, otherwise the claim may not be covered. Where the amount involved is modest, the bias is towards settling. That is why the NHS pays out so much each year.

Whilst not disputing that is the case how is that relevant to the point? Just because if the accountant wants to benefit from their cover they must inform their insurers doesnt make it possible for the OP to force their accountants to claim from their insurance.

It was to correct your statement responding to my earlier post that "there is no obligation for them to pass it on to their insurers". The process has to start with advising the insurer. A discussion then takes place between the insurer and the accountant, exploring things like the quantum of a claim, and whether the accountant thinks that it is possibly a valid claim, or whether it is spurious. They reach an agreement as to how the matter will be pursued, and if the claim is not spurious, that normally leads to an offer of settlement without admission of liability.

Good points but, just on the point of not accepting resposibility.  My experience is that insurers, if they settle a claim will want to get it over and done with so that there is no come back at a later date.  So they will want to have responsibilty for the mistake established one way or the other.  Settling with no admission of responsibility for the mistake can lead to the possiblity that the case could re-open and further claims be made on the same matter at a later date.   In small claims perhaps an insurer might accept a written disclaimer regarding future claims from the aggrieved client, but evn if the aggrieved party agreed to that I think insurers still get nervous of accepting that as disclaimers have their limits.

I once paid damages myself out of my own pocket with the full knowledge of my insurers.  The insurers, in that situation, told me that I should make the payment as a "goodwill jesture" which means that I do not accept guilt.  My client was happy with that as he got his money quickly.   The amount was less than the excess on my insurance.  

Normally the basis of the settlement is that the claimant is paid a sum and signs away any right to pursue it further. Liability is not admitted. Your payment was not covered by the insurers anyway, as it was within the excess.

Not my experience of PII claims.  I have been at the end of one claim myself and have been involved with several others as an expert witness.  PI insurance companies are keen to establish responibility because many people do not understand what people and firms  who offer a professional service do and are actually responsible for under the law and bring claims that very often fail when they are brought before the courts. 

Sandtree

Jeremy535897 said:

Sandtree said:

Jeremy535897 said:

Sandtree said:

Jeremy535897 said:

Sandtree said:

Zil4315 said:

We understand we are responsible but there is a reason why we pay accountants to deal with everything on our behalf, because we are not accountants. We specialise in what we do and they specialise in what they do. Even if we looked over everything they do, I'm not sure an error would be picked up because we don't know what we would be looking for.

We know now that we claimed wrongly but at the time, we didn't know and we didn't check. We simply trusted the government letter we received and thought we were super lucky (we are never lucky!). That was our mistake yes, but we can't help thinking that if the accountants hadn't made the mistake of not entering the cessation date on the tax return, we wouldn't be in this mess.

When determining liability the courts look at the remoteness of the cause and effect so as an easy example, a person is injured in a car accident that wasnt their fault, they get a few weeks full sick pay and then it stops. They can claim their loss of earnings from the at fault driver/their insurance. You could attempt to argue that their employer should be able to claim the sick pay back from the driver too as its their fault they had to pay wages without getting any work done but the courts have deemed that this is too remote.

From what you say the accountants do appear to have made a mistake but it feels to me to be too remote to link the mistake to the loan.

I assume you guys filled in the grant forms and/or signed them in which case it was your duty to ensure that this was done correctly and accurately. I've not seen the form but I'd be surprised that there wouldnt have been a number of red flags... "Self Employed Income Support Scheme", you arent self employed if via a LTD... no questions about the company name, number, registered address etc.

The accountants may have a token liability but it'd presumably have been cleared up in the 20/21 returns had the grant not been received. 

Your focus should be on negotiating a repayment plan for the grant if the business remains viable with the debt.

Assuming that the accountants carry professional indemnity insurance, the immediate question is more what the insurers think than what a court thinks, and they will be influenced by the amount of the claim. It makes total sense to negotiate payment terms as soon as possible (apart from anything else, you have a duty to mitigate your loss), but don't immediately write off your chances. Most genuine insurance claims are settled out of court.

There is no obligation for them to pass it to their insurers to deal with... unlike Motor or EL you cannot circumvent the party you are blaming. Even if they do pass it to their insurers what the insurer will be doing is ultimately trying to predict the outcome of litigation with an element of risk margin 

It is a condition of all PII insurance that you must immediately inform the insurer that you face a claim, otherwise the claim may not be covered. Where the amount involved is modest, the bias is towards settling. That is why the NHS pays out so much each year.

Whilst not disputing that is the case how is that relevant to the point? Just because if the accountant wants to benefit from their cover they must inform their insurers doesnt make it possible for the OP to force their accountants to claim from their insurance.

It was to correct your statement responding to my earlier post that "there is no obligation for them to pass it on to their insurers". The process has to start with advising the insurer. A discussion then takes place between the insurer and the accountant, exploring things like the quantum of a claim, and whether the accountant thinks that it is possibly a valid claim, or whether it is spurious. They reach an agreement as to how the matter will be pursued, and if the claim is not spurious, that normally leads to an offer of settlement without admission of liability.

There is a notable difference between informing your insurers and passing it over to them to deal with the matter. 

With Motor and EL a TP can claim against the insurer against the insured's wishes whereas that is not the case with Professional Indemnity/Liability (depending where in the world you are)

Zil4315

Thank you to everyone who took the time to comment. We have changed accountants now as we were going round and round in circles and we've arranged a payment plan for the SEISS.