An accountant owes you a certain duty of care when you hire him or her to help you handle financial matters. He or she has an obligation to observe the accepted standards of the accounting profession, avoid conflicts of interest and advise you on what financial strategies will be to your benefit.
If your accountant fails in his or her obligations, you may be able to bring a lawsuit for professional malpractice. However, recovering damages from an accountant for malpractice can be a challenge for several reasons.
Statute of limitations
For a civil suit, such as a professional malpractice claim, the law identifies a time frame in which you must act, also known as a statute of limitations. You must act within this period or forfeit your right to seek legal remedy.
Each state sets its own statutes of limitations, and the amounts of time vary depending on the type of civil case. For example, the statute of limitations for negligence by an accountant is two years, but for a breach of fiduciary duty, it is four years. Generally, the starting point for the statute of limitations is the time that you discovered the harm.
Burden of proof
As the plaintiff in a professional malpractice case, you bear the burden of proof that you came to harm as a result of an accountant’s misconduct. In other words, you must be able to demonstrate that you received service or advice from your accountant that fell below the professional standards established in the field, and you sustained damages because of this.
None of this should discourage you from taking legal action if you feel you have experienced professional malpractice. Knowing the challenges that you can face ahead of time may help you better prepare for them.