Holding accountant liable for violation of duty of care: how does that work?

The duty of care of an accountant is not just to provide the proper advice and undertake actions, such as objecting to wrongful tax assessments. The duties of an accountant also include adequate communication with a client. Professional liability lawyer Marco Guit discusses a recent ruling by the Court of Appeal where this matter was addressed.



Objection to recovery assessment by the Social Insurance Bank?

The accountant in this case conducted several accountant activities for the client, including handling a decision by the Social Insurance Bank (SVB). According to the SVB, the client had received €4,500 excess surviving dependants’ benefits and the SVB issued a recovery order. The accountant stated that the decision by the SVB was wrong. The client asked him to take action. He neglected to do so in time, which meant that the client was confronted with a writ of execution of over €6,000.

Client claims damage compensation

In civil proceedings the client claims a declaratory ruling that the accountant violated his duty of care and that he is liable for the loss, i.e. the collection costs of the writ of execution. The accountant argues that he stated at the time that the amount of the recovery order in itself was correct, but the substantiation of the decision was incorrect. The client should therefore have paid on the first summons, according to the accountant.

Court of appeal: violation duty of care by accountant

The Court of Appeal disagrees. The accountant could have understand from the many e-mails and letters sent to him by the client, that the client did not understand it this way. She assumed that the accountant would object to the amount of the recovery. The accountant should have informed the client in a better way – preferably in writing – and advised her to pay on time. The accountant did not act as could be expected from a reasonably acting, reasonably skilled accountant. The Court of Appeal therefore holds the accountant liable for the loss resulting from this negligence.

Determining damage compensation after professional error

If the duty of care is violated, all loss from this failure is to the account of the accountant. But how is this loss calculated? In principle the adverse difference between the actual situation and the fictional situation (if the accountant had not violated his duty of care) is eligible for compensation. There is not always loss from professional error. For example, some years ago the Court of Appeal ruled that although the accountant violated his obligation to warn, the fact that he failed to warn did not have a detrimental effect for the client. The financial situation would have remained the same if he had been warned.

AMS lawyer when an accountant is held liable

AMS lawyers have a great deal of experience in cases concerning professional liability. Whether this concerns accountants or other consultants, such as brokers or civil-law notaries, we can help you. Apart from sending a notice of liability, we can also start complaints proceedings or civil damage proceedings. If you want advice or have been held liable, please contact us.