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Original poster

I’m terrified of being sued

40 replies

BeeBeeSmoo · 26/11/2023 21:04

I’m an accountant, and in my role I misinterpreted a technical rule that I should know inside out. A client is now facing a much higher tax bill (and penalties). Understandably they are furious and are threatening to sue me personally, not just the company I used to work for. I left my job over a year ago and am now a SAHM.

We have no money, and live month to month on my husband’s salary. We have a loan on the car even. The house has a small amount of equity (about 20k). I own it jointly with DH. Will we be forced to sell the house?

OP posts:
fishfingersandchipsagain · 26/11/2023 21:06

If he was a client of the company then his contract was with the company, not with you personally, so he has nothing he can sue you for. The company’s insurance will cover there part.

The only complication would be either if you worked for the client on the side, away from the company or after you left their employment, or possibly if it was your company.

tribpot · 26/11/2023 21:09

Yes, I agree with @fishfingersandchipsagain . Assuming the client's contract was with your company, it's their liability, not yours. Not least because they should have been supervising your work.

Mistakes happen, that's life. Nobody died. (I'm not saying you're over-reacting to the threats you're getting, just trying to put it into perspective). How are you even aware that the client wants to sue you personally?

burnoutbabe · 26/11/2023 21:18

Yes I'd agree it's the company or partnerships liability.

Unless you were also a partner?

About all he can do personally is report you to your professional regulator but again assuming you were not the partner or own company, the firm should have spotted the error before advice went out.

Original poster
BeeBeeSmoo · 26/11/2023 21:25

The advice was checked by 2 other people before it went out to the client. They didn’t spot my error either. I feel sick about it and haven’t slept properly in weeks. The client is someone I know personally. They have said that because of the consumer duty act I am personally liable as well as the company. They have advised me to get myself a solicitor.

OP posts:
disappearingfish · 26/11/2023 21:27

Do you have professional indemnity insurance?

Original poster
BeeBeeSmoo · 26/11/2023 21:29

No, I know longer work

OP posts:
VanCleefArpels · 26/11/2023 21:32

actions taken in the course of your employment are the responsibility of the employer. How much extra money did the client have to pay? It will cost a large 4 figure sum to take a negligence claim to court so if the loss is a lot less than that they may not think it worthwhile to pursue. Either way this is not something you will have to pay so please stop worrying

MustBeDueSomeBetterFeet · 26/11/2023 21:33

I thought the consumer duty regulations were related to the sale of financial services products, not professional services?

user628468523532453 · 26/11/2023 21:37

They have advised me to get myself a solicitor.

They sound like a bully throwing their weight around.

fishfingersandchipsagain · 26/11/2023 21:41

They are trying it on.

If you have legal protection through your home insurance then give them a call just reassure yourself. Otherwise a free consult with a solicitor.

But honestly, unless you were doing work on the side for extra cash, you have nothing to worry about. Tell them to stop harassing you.

fiorentina · 26/11/2023 21:46

Consumer duty is financial services related - set by the FCA. Your former company should have Indemnity insurance and the client had an agreement with the firm not you. Can you contact your former employer and reassure yourself.

Doggymummar · 26/11/2023 21:51

I would call you ex employer and ask what your liability is in all this. Can't they contact HMRC and put it right? I had this last week with a client (tax) and I contacted HMRC explained the situation and they accepted it was just a mistake, not careless or fraudulent and my client was set correctly with no penalty. They are pretty reasonable if you fess up.

CardinalCat · 26/11/2023 21:52

Any liability will sit with the company or firm you were working for and will almost certainly be covered by PI. Mistakes happen all the time. The client sounds like they're talking crap about the consumer liability angle. If you're really worried contact your former employer (it might be courteous to do this anyway to give them a heads up that a complaint is incoming, so they can retrieve the file and inform their insurers). I am struggling to see how you would be personally liable. Even if you were a partner you'd have PI cover (and it would still be the entity that got sued, not you ok your personal capacity.)

tribpot · 26/11/2023 21:53

The Consumer Duty regulations aren't an act, are they? And they came into force at the end of July and your mistake happened long before that.

I would block this former customer so they can't contact you directly. Get yourself some low cost legal advice as others have suggested but this appears to be absolutely your former company's problem, not yours. Especially since two other employees checked the work without spotting the mistake.

AuContraire · 26/11/2023 21:53

The company you used to work for will have professional indent insurance, it will pay the legal costs of defending the claim (which will be significant, especially if the company (and insurer) decides to fight it rather than accept the error and pay) and any compensation due.

Don't panic

StateFlowerOfVirginia · 26/11/2023 21:53

Bless you this sounds extremely upsetting and I can see why you're frightened but I agree with everyone else it's the company's problem. Try and get a good nights sleep x

mauveiscurious · 26/11/2023 22:10

If you were employed you are not legally responsible.

This is not normal behaviour, your employer should have stepped in to stop this contact. Block on social media etc

WhatYouWearing · 26/11/2023 22:15

The client is someone I know personally

I'd be inclined to tell them you haven't any money for a solicitor and they'd be wasting their time coming after you because you're now a SAHM with no savings.

HamBone · 26/11/2023 22:25

Am I understanding correctly that that they were liable to pay the extra tax but you missed it? Now they have to pay late payment penalties as well, but that’s it.

As PP’s have said, they’re trying to bully you. Your former employer’s insurance will cover you.

GLC789 · 26/11/2023 22:27

BeeBeeSmoo · 26/11/2023 21:25

The advice was checked by 2 other people before it went out to the client. They didn’t spot my error either. I feel sick about it and haven’t slept properly in weeks. The client is someone I know personally. They have said that because of the consumer duty act I am personally liable as well as the company. They have advised me to get myself a solicitor.

Icohkdnt read and run here!! I am somewhat good at understanding FCA regulatory guidelines, particularly Consumer Duty as its so recent.

You are not liable under consumer duty. When you work for a company, they are liable. Especially if you were NOT the last person to check the information.

As an ex employee you were only accountable to act with integrity. Making a genuine mistake DOES NOT breach financial integrity. That's what liability insurance is for, which your former company should have. If they don't, that's their tough luck, not yours.

Please relax. Remind the ex client, that their business was with the company, not you. You are no longer in the company. Therfore, it is inappropriate and unwarranted for them to continue to contact you. Let them know you will seek your own legal advice if they do not cease all direct contact with you immediately. Then block contact.

GLC789 · 26/11/2023 22:27

I couldn't * Please excuse my fat thumbs x

fluffiphlox · 26/11/2023 22:28

This is why professionals have PII - presumably your company has it.

PaminaMozart · 26/11/2023 22:29

Why can't they file corrected returns?

JamMonster · 26/11/2023 23:34

They should be able to reclaim all the money by just suing the firm, so I don’t see how they’d then have cause to come after you too. The firm may also just pay the amount to the client if they agree there is negligence to avoid the legal battle. Also as others have said, the contract the client had was with the firm, not you, so I’m not sure what grounds there would be to sue you personally on?

The client will have signed the return was supposed to check it and can’t fully pass on responsibility. If the client can prove that the firm who prepared it was negligent (I.e. show that the firm prepared the return and not them), the HMRC will often waive or suspend the penalties.

Can you ring your old employer and ask to put your mind at rest? Also, if you’re qualified then your institute should have a free legal advice line. If not, you could try the citizens advice bureau?

Surely if this situation was possible then professionals would never want to change jobs! And it would be chaos because innocent mistakes happen literally all the time! And I’d hope more training would be given to warn you, what happens when people retire etc? I’m sorry you’re being harassed, hopefully you can avoid any further contact with them in any capacity.

Unexpectedlysinglemum · 26/11/2023 23:57

I think you need to get in touch with your former work about their duty of care to you and get advice from them
About stopping him harassing you