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Accountants & Financial Advisor Negligence Claims

Many people and businesses rely on advice from accountants, financial advisors or insurance brokers to help navigate their financial obligations and requirements. But if your advisor makes a mistake or gives you the wrong advice, it could have serious financial consequences for you or your business.

If you have been on the receiving end of negligent advice, you are entitled to be restored to the position you should have been in but for that advice. So, if you think you have been let down by your financial advisor, accountant or insurance broker, it is important to seek legal advice to see whether you have grounds for recovery of your losses for professional negligence. Depending on your case, you may have different options to resolve the issue and in many instances court action is not required.

When advisors let you down

While every case is different, the example issues below highlight some common areas of dispute with financial advisors, accountants and brokers that may be grounds for a professional negligence compensation claim:

As most people who are required to lodge accounts will be aware, if your accounts are lodged late, you are likely to get a penalty. However, it may be that your accounts are late because your accountant failed to lodge them within the deadline or, in more serious cases, failed to lodge them at all.

Part of the reason we employ accountants is to ensure we comply with the various deadlines and avoid having to pay unnecessary expenses. So, if your accountant has failed to lodge your accounts and you have received a penalty and other losses as a result, you may have a claim to recover those losses against them.

One of the main reasons for instructing an accountant or financial advisor is to ensure that the tax you owe is calculated correctly and paid. However, sometimes miscalculations can happen that result in an unexpected tax liability. In such cases, HMRC will want to be paid as quickly as possible, sometimes demanding payment as a lump sum.  An outstanding liability to HMRC can be catastrophic to a business or individual and could have serious financial consequences such as bankruptcy for an individual and liquidation for a business. 

Your accountant or financial advisor owes you a professional duty of care to calculate your tax liability correctly.  That is likely to have caused you loss, by way of penalties and other issues for your business or individual affairs. If that duty is breached, even as a result of a mathematical error, you may have grounds to recover your losses against them.

You go to a financial advisor to get sound financial advice. But if the advice is incorrect, you may incur a tax liability. HMRC is likely to pursue payment of the tax liability vigorously which may have serious consequences for your or your business’ liquidity or your ability to pay debts as they fall due.

In circumstances where the liability has arisen as a result of negligent advice, you may have a claim against your advisor to recover losses incurred as a result. 

If your advisor is obliged to and failed to pay tax on your behalf, you may be liable for unexpected fines and penalties. If you can demonstrate that your advisor should have paid tax on your behalf and they failed to do so, you may have a claim to recover your losses against them.

Whether you have a claim against your advisor for a bad investment very much depends upon the individual circumstances and what you were told about the benefits and risks of the investment.

Your financial advisor owes you a duty of care to advise you thoroughly on the potential risks and rewards of an investment so that you may make an informed decision about whether to proceed. If they failed to tell you about the risks and you opted to invest without the knowledge that the investment was high risk you may have a claim for damages.

Likewise, if the advice you received did not fit with your investment strategy (for example you are nearing retirement age and want to go for low-risk rather than high-risk investments), you may also have a claim against your advisor. 

Each case turns on its individual circumstances and, in particular, on the advice you received and the losses you have suffered as a result.

In some cases, insurance policies can be mis-sold or fail to cover the scenarios you expect. Your grounds for compensation claim depend very much on what advice you were given about the insurance product and about the circumstances in which the insurers will pay out. Such claims can be similar to the PPI scandal, where people were not made aware of the terms of the policy or the policy was not suited to their individual circumstances.

If unexpectedly, your insurer has denied liability and refused to pay out, you may have a claim against them or against your insurance broker. Each case depends on the policy wording and what was said to you by the insurer or broker at the time of putting the policy in place.

How can Thorntons help?

The team of specialist Professional Negligence Solicitors at Thorntons are experienced in a number of claims against accountants or financial advisors, with a proven track record of success.  We will assess your case and quickly let you know if you have grounds for a professional negligence claim and help you through the whole process.

We understand that not every client wants to go ahead with a court action. In some cases, we can offer alternative dispute resolution methods such as mediation or a complaint to the relevant insurance or financial ombudsman to help to resolve matters.

The advice will be tailored to your individual circumstances and the aim you wish to achieve, for instance it may be important to you to maintain a working relationship with your advisor or instead you may want to terminate the relationship and seek compensation. Whatever your aim, the team will be on hand to provide advice specific to your individual situation.

Call us on 03330 430 350 or complete our enquiry form and we will contact you. We will discuss your situation with you, answer any questions you have and advise you if you have grounds for a claim for damages. If you then want to go ahead, we will start the claims process for you straight away. Our discussion will be confidential and you are under no obligation to make a claim.