Limited horizons

Accountants are disappointed by moves to reform the law on liability, says Roger Trapp

These are nervous times for Britain's accountants. Almost to a man and a woman, they are constantly scanning the political horizon for signals relating to the issue that has gradually consumed them over recent years.

That jumpiness was clearly demonstrated last week when Ian Lang, President of the Board of Trade, made a long-awaited announcement to the effect that his department would introduce legislation to lift the effective bar on limited liability partnerships in the UK "at the earliest opportunity".

This is not exactly what the profession had in mind. For a start, it does not appear that any proposals will appear before the spring, when - if a poll has not already been forced upon the Government - election fever will be gripping the country.

Second, this announcement deals only with the tip of the iceberg. Limited liability partnerships merely prevent individual partners being wiped out personally by a claim being brought against a negligent colleague. Accountants have their hearts set on reform of the law of joint and several liability, under which a defendant in a civil suit can be held totally responsible for a plaintiff's loss, even if only marginally at fault.

In recent months they have won many organisations over to their cause. Just a few hours before Mr Lang's answer to a parliamentary question, the Confederation of British Industry joined nearly 20 other employers' organisations and professional bodies in writing to remind the DTI that they had made comments on the issue much earlier in the year, and now expected some action.

But this is just more evidence of the profession's edginess. While the rest of the business community is keen to assess what will happen in a general sense if any of the various permutations comes to pass once the general election is finally fought, one senses that the accountancy profession is really only concerned about what it will mean for auditors' liability. This is not just evidence of how spending too much time looking at figures can warp the brain. It also reflects the degree to which the issue dominates accountants' lives.

The liability debate hangs over just above everything they do - from carrying out audits to discussing future regulation and any extension of the auditor's role. If senior partners are to believed, it is even intruding on recruitment of graduates and retention of partners.

But it is also fair to say that the whole affair demonstrates the extent to which accountants - if they do not all manage to live up to the Monty Python image - are different from the rest of us. Just as in the past they have, thanks to the wonders of financial engineering, made debts into assets, and performed other tricks, they now appear to be convincing themselves that professional liability is a crucial issue in the world at large. One that - like education, the health service and family values - John Major and Tony Blair should have firm views on.

Accordingly, they have been grasping at straws. Last year at this time there was the imminent report of the Law Commission study of the joint and several principle. (Not only did this come up with the "wrong answer", but Professor Andrew Burrows, chairman of the group that carried out the work, last week made a speech in which he reiterated his faith in the notion.) Then there was the intervention of Michael Heseltine, the Deputy Prime Minister, reportedly on the grounds that lack of reform of this area threatened Britain's competitive position, and that the City was alarmed at the prospect of big firms responding to Jersey's plans to help them out by allowing limited liability partnerships. (Though this development spawned the idea that a positive announcement would be made in the summer, it did not in fact happen until last week, and turned out to be a "damp squib".)

In yet further evidence of the profession's fear of upsetting a delicate situation, nobody really condemned this half-way house. Instead, insiders contented themselves with comments of the "it's a step in the right direction" variety, and looked ahead again. Apparently, there may be another announcement later in the month about what Graham Ward, the Price Waterhouse partner in charge of the Institute of Chartered Accountants' lobbying effort, calls "the real issue".

But perhaps the true reason behind the lack of progress lies in the failure to entice the lawyer fraternity aboard the reform bandwagon. As Mr Ward points out, this failure could be put down to the perception that "a litigious environment is good for lawyers" - until they are on the wrong end of a suit.

On the other hand, the absence of cries of complaint from a group that is not renowned for keeping its own counsel might be interpreted as evidence that the problem is not as bad as it is said to be.

Whatever the explanation, a government that is hard-pressed to get reform of building societies and competition law on to its agenda is unlikely to see much public appeal in tackling an issue that is barely understood within Britain's boardrooms, let alone outside them. So senior partners of large firms could yet be spending more time than they had bargained on flying between Britain and Jersey

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
people
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film Ridley Scott reveals truth behind casting decisions of Exodus
News
people
Sport
footballArsenal 2 Borussia Dortmund 0: And they can still top the group
PROMOTED VIDEO
Arts and Entertainment
An unseen image of Kurt Cobain at home featured in the film 'Kurt Cobain: Montage of Heck'
filmThe singers widow and former bandmates have approved project
News
Andy Murray with his girlfriend of nine years, Kim Sears who he has got engaged to
peopleWimbledon champion announces engagement to girlfriend Kim Sears
Arts and Entertainment
Jake Quickenden and Edwina Currie are joining the I'm A Celebrity...Get Me Out Of Here! camp
tv
Arts and Entertainment
George Mpanga has been shortlisted for the Critics’ Choice prize
music
News
Albert Camus (left) and Jean-Paul Sartre fell out in 1952 and did not speak again before Camus’s death
people
Arts and Entertainment
Roisin, James and Sanjay in the boardroom
tvReview: This week's failing project manager had to go
News
Ed Miliband visiting the Holocaust museum in Jerusalem. The Labour leader has spoken more openly of his heritage recently
newsAttacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But are the barbs more sinister?
Arts and Entertainment
'Felfie' (2014) by Alison Jackson
photographyNew exhibition shows how female creatives are changing the way women are portrayed in advertising
News
i100
Life and Style
Fright night: the board game dates back to at least 1890
life
Environment
The vaquita is being killed by fishermen trying to catch the totoaba fish, which is prized in China
environmentJust 97 of the 'world's cutest' sea mammals remain
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

    £16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

    h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

    £35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

    Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

    £Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

    Citifocus Ltd: Operational Risk Analyst

    £Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

    Day In a Page

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
    Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

    Sol Campbell cries foul at Labour's mansion tax

    The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
    Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

    Sarkozy returns

    The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
    Is the criticism of Ed Miliband a coded form of anti-Semitism?

    Is the criticism of Miliband anti-Semitic?

    Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
    Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

    Ouija boards are the must-have festive gift

    Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
    There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

    In pictures: There's a Good Girl exhibition

    The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
    UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

    UK firm Biscuiteers is giving cookies a makeover

    It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
    Can SkySaga capture the Minecraft magic?

    Can SkySaga capture the Minecraft magic?

    It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
    The King's School is way ahead of the pack when it comes to using the latest classroom technology

    Staying connected: The King's School

    The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
    Christmas 2014: 23 best women's perfumes

    Festively fragrant: the best women's perfumes

    Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
    Arsenal vs Borussia Dortmund: Alex Oxlade-Chamberlain celebrates century with trademark display of speed and intuition

    Arsenal vs Borussia Dortmund

    The Ox celebrates century with trademark display of speed and intuition
    Billy Joe Saunders vs Chris Eubank Jnr: When two worlds collide

    When two worlds collide

    Traveller Billy Joe Saunders did not have a pampered public-school upbringing - unlike Saturday’s opponent Chris Eubank Jnr
    Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

    Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

    Our partner charities help veterans on the brink – and get them back on their feet
    Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

    Putin’s far-right ambition

    Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
    Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

    Escape to Moominland

    What was the inspiration for Finland's most famous family?