Dispute over liability resumes

Corporate financiers are poised to resume negotiations in their long-running dispute with accountants over who should be liable when mergers and acquisitions go wrong.

The two sides have been arguing about the small print indocumentation produced during corporate deals, with accountants attempting to get "limited liability" clauses inserted to restrict the size of claims against them in the event of subsequent trouble. But this has posed problems for investment bankers, who fear that blame could shift to them.

The issue would be debated again in the new year, sources at the Big Six accountancy firms and at the London Investment Bankers Association said. The LIBA said it was concerned that advisers would be unable to do their jobs properly unless the dispute was resolved.

Banks and accountants accepted a moratorium, under which accountants agreed not to put their limited liability clauses in public documents provided the bank involved was a member of the LIBA.

This measure has been running for a year and LIBA will meet with the accountants to discuss ways to make progress. Kit Farrow of the LIBA said: "Isee the continuation of the moratorium as desirable."

But he insisted that "the long-term solution is a reform of the law of joint and severance liability".