DAC Beachcroft's Accountancy Newsletter features topical news and insights for our clients and contacts
Sports Direct and Privilege
The Court of Appeal has handed down its judgment in Sports Direct International Plc v FRC [2020] EWCA Civ 177. This was Sports Direct’s challenge to the FRC, which had sought to compel production of privileged documents, where the privilege belonged to Sports Direct (an audit client, and hence not under FRC investigation). The FRC sought these documents for the purposes of its investigation into a recent audit of Sports Direct.Read more
SAAMCO principles remain a complex area of law – how does it apply to a claim based on alleged audit negligence?
BTI 2014 LLC v PWC [2019] EWHC 3034 (Ch).
Two recent cost decisions – Green, Mughal, Mughal and Edwards v SGI Legal LLP and Hanley v JC & A Solicitors are likely to impact future professional negligence claims against solicitors. They both involve the issue of the deduction of costs from a client's damages.
There is now a “dominant purpose” test for legal advice privilege – some practical points for accounting practices
Litigation’ privilege has long been subject to a ‘dominant purpose’ test. For a document to be privileged, the dominant purpose for its creation must have been for use in relation to contentious proceedings (either in existence or reasonably in contemplation). For a long time, this feature of litigation privilege distinguished it from legal advice privilege (communications privileged due to their seeking and/or disclosing any legal advice, whether in contemplation of proceedings or not).Read more
FRC consults on proposals to revise ISA standards for identifying and assessing risks of material misstatement
The FRC is consulting on proposals to revise International Standard on Auditing (UK) 315 – Identifying and Assessing the Risks of Material Misstatement Through Understanding the Entity and the Environment.Read more
Disguised Remuneration Schemes and The Loan Charge- Are Accountants Exposed?
Accountants have been facing claims for a while because of their previous involvement in disguised remuneration schemes looking to reduce income tax and national insurance contributions. The 2019 Loan Charge brought a new wave of claims with Claimant solicitors and Claims Management Companies actively seeking new clients who have been affected by the legislation, and the recent changes to the Loan Charge creates further risks.Read more
Fully Charged! Recent decisions where the Court has been positive in compelling parties to engage in ADR
Parties to litigation have long been encouraged to consider Alternative Dispute Resolution (ADR). Its numerous benefits include assisting parties to resolve disputes more quickly and cheaply than through the litigation process. Parties are free to design creative solutions, tailored to their needs and which a Court may not or may not be able to order. ADR is confidential, and even if it does not produce an immediate settlement, can be a useful reality check for all parties, giving everyone the opportunity to evaluate their opponent and test arguments. Whilst there may be cases unsuitable for ADR, that is likely the exception rather than the rule, e.g. if precedent is required as there are a number of similar claims waiting in the wings.Read more
Administrators should act in the best interest of company’s creditors as a whole - in the absence of a special relationship it should not favour any particular creditor
Fraser Turner Limited v PricewaterhouseCoopers LLP and others [2019] EWCA Civ 1290
The Court of Appeal has upheld a decision striking out claims against administrators which alleged that they owed a duty to a specific creditor and were guilty of misfeasance.
A warning for insolvency practitioners – take care when handling personal data
The Financial Conduct Authority, the Information Commissioner’s Office and the Financial Services Compensation Scheme have issued a joint statement warning insolvency practitioners to be careful when handling personal data.Read more
FRC moves towards registration of “PIE Auditors”
A key recommendation of the Kingman review was that the FRC should undertake the approval and registration of audit firms conducting PIE audits
