Mediation Case Studies
Professional Negligence Accountancy Dispute
The Problem – Professional negligence, the claimant (catering business) claimed for £87,000 for professional negligence against the defendants (established accountancy firm) for the failure to detect the business he purchased was not worth what he had been advised it was, all investigations re the company accounts and books were left to the defendants, whereby the claimant alleged he suffered a substantial loss and had the defendants advised him correctly as they should have he never would have brought the business.
The defendants argued that they had made all the necessary checks, discrepancies were brought up with the claimant who did not take much notice. There were some issues admittedly they had missed, but this was due to the accounting of the previous owners, nonetheless those errors should have been picked up.
Despite this the defendants argued that the claimant would not have listened to them anyway even if they had uncovered everything, counsel for the claimant highlighted that was not the point.
The Solution – The £87,000 figure was broken down and it was ascertained that a court would not justify such an amount on the evidence and explanation provided however it was clear that they would award an amount. The parties agreed to settle for £45,000.
- The mediation took 1 day compared to the 13 months this professional negligence dispute had already gone on.
- The mediation cost each party £550.00 each compared to the thousands they had already spent on legal fees and the thousands they would have had to spend had they continued with Court action.