Introduction

This helpsheet has been issued by ICAEW’s Technical Advisory Service to help ICAEW members to manage their professional liability. This Helpsheet is complementary to, and should be read in conjunction with TECH 09/15 BL Managing the professional liability of accountants.

Its aim is to provide illustrative wordings in a limited number of cases for consideration by members. These wordings should not be regarded as definitive advisory wordings on which members should rely without taking independent advice.

Illustration 1 - Members Retained as General Tax or Other Advisors (see paragraph 38, TECH09/15BL)

1A.Scope confirmation before advice is provided

You have asked us to provide advice in writing on the following topics: [A, B, C]. You are responsible for making available any relevant information and documentation, whether or not requested by us. Our responsibility is to consider the information or documentation made available by you and the topics above and to advise on those topics in writing. Our advice will be addressed to you and will be provided on or around [date]. The scope of our advice will be limited to the topics noted above and we will not advise on other matters that may be related to these topics unless we agree with you to do so, separately and in writing. Our advice will be provided pursuant to and will be governed by our engagement letter dated [date].

1B. Scope confirmation when advice is provided

This advice is provided in response to your request that we advise on the topics discussed below. Please let us know promptly on receipt if the scope of our advice does not cover the scope of your request. Our advice set out here is limited to the topics discussed and does not extend to any other matters that may be related to those topics. This advice is provided pursuant to and is governed by our engagement letter dated [date].

Illustration 2 - A simple clause in an engagement letter limiting liability (see paragraph 51, TECH09//15BL)

Our liability to you in contract or tort (including negligence) or under any statute or otherwise, for any loss or damage caused to you by us in any way in connection with this engagement letter or any services provided by us pursuant to this engagement letter, including if caused by our negligence, will not exceed in aggregate the sum of [£amount]. This limitation on our liability will not apply beyond the extent permitted by law.

Illustration 3 - Limitations on the work to be undertaken (see paragraph 66, TECH09/15BL)

You have asked us to report on [topic A] which is a topic giving rise to various complexities. You have required our report within a short timeframe, which is achievable but presents challenges. The depth of our report and the extent to which we are able to address the issues arising will inevitably be curtailed by the limited time available. If we had been given further time, additional points might arise and our report might be expanded to include those points. Further time would also enable us to consider the topic in greater depth. We have taken this into account in the fee that we will charge and the liability that we will accept.

Illustration 4 - Indemnity from client (see paragraph 78, TECH09/15BL)

This engagement letter clarifies that we are engaged by you to provide advice exclusively for your benefit and there are agreed restrictions on distribution of our advice to third parties. Our duties are owed to you alone and we will deny any responsibility or liability to any third party obtaining access to our advice without our written permission. Despite these safeguards, there is a risk that a third party might obtain unauthorised access to our advice and rely on it and make claims against us. Recognising this risk, you agree that, to the fullest extent permitted by law, you will indemnify us and our partners and staff and hold us and them harmless against all actions, proceedings and claims brought or threatened against us or them by any third party, and all loss, damage and expense (including legal expenses) relating thereto, where such action, proceeding or claim by any third party in any way relates to or concerns or is connected with the provision of our advice pursuant to this engagement letter.

Illustration 5 - A simple notice for a report clarifying duties and responsibilities (see paragraph 85, TECH09/15BL)

This Report is confidential and has been prepared for [client name] (‘the Client’) pursuant to engagement terms agreed with the Client and should be read in conjunction with those terms, which include restrictions on disclosure to other parties.

The work underlying preparation of this Report has been performed by us so that we might report to the Client on the matters set out in the agreed engagement terms and for no other purpose. This Report is for the benefit of the Client alone and is not designed to be of benefit to anyone else. In preparing this Report we have not taken into account the interests, needs or circumstances of anyone apart from the Client.

This Report is not suitable to be relied on by any party wishing to have any rights of recourse against us except the Client for any purpose or in any context. Any party other than the Client that obtains access to this Report or a copy and chooses to rely on this Report (or any part of it) does so at its own risk. To the fullest extent permitted by law, we do not assume any responsibility and will not accept any liability in respect of this Report, our underlying work, including any findings made by us or judgements or conclusions or opinions formed by us, to any party except the Client.

If in doubt seek advice

ICAEW members, affiliates, ICAEW students and staff in eligible firms with member firm access can discuss their specific situation with the Technical Advisory Service on +44 (0)1908 248 250 or via webchat.