In this edition of the Update we review a recent Supreme Court decision involving the Institute of Chartered Accountants in England and Wales ("ICAEW") in which the Court ruled that it was contrary to the principle of res judicata to allow a second complaint of discreditable conduct against an accountant to proceed. We consider the implications of an important Court of Appeal decision which suggests that a foreign financial regulator can, through the Financial Services Authority (FSA), compel accountants to provide it with documentation relating to present or former clients, especially regarding instances of alleged fraud.
We look at a number of other decisions of potential significance to accountants and their professional indemnity insurers including one where the Court of Appeal clarified that a company's accounts can provide a "true and fair view" of its assets and liabilities even if a hidden liability is not reflected in them when such liability is unknown and undiscoverable, and two other cases which have important ramifications for accountants and insurers in limiting liability for claims from disgruntled clients. The ongoing issue of legal professional privilege for accountants is once again revisited by the Court of Appeal and we conclude with a look at a recent decision which demonstrates that there are limits to the enquiries that tax advisers are expected to make when they are presented, in an 'off hand' way, with new information. The decision also provides useful guidance as to the division of responsibility between accountants and solicitors where both are retained.
To read the full update please click here