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Making a claim under the Scheme can be complicated and stressful. Our Commercial Litigation Team and Financial Services Team are here to help and have experience dealing with claims under the ICAEW scheme.
It is well established that the primary avenue of claim if you suffer financial loss because of poor advice received from a professional is one of professional negligence.
It is possible to bring a claim against someone you have paid to provide an expert service, such as a solicitor, barrister, surveyor, architect, accountant, financial advisor or tax advisor.
What is less well known is that there are other actions that you can bring against a professional in circumstances where the prospects of recovery in a claim of professional negligence are limited.
As our Financial Services experts will go on to explain, one such action is in respect of accountants, and is called the Investment Business Compensation Scheme (the Compensation Scheme).
In order to pursue a claim under the Scheme, the accountancy firm providing the advice must have been authorised or licensed by either the ICAEW, ICAS or ICAI at the time the investment business advice was provided.
The key element to be satisfied is that the loss must have arisen from the advice given.
The ICAEW defines the Scheme as "a fund of last resort". This means that example circumstances in which a victim of poor investment advice might look to rely on the Compensation Scheme are:
The Scheme is administered by The Chartered Accountants Compensation Scheme Limited (the Company), who are responsible for paying compensation to successful Claimants in accordance with the Compensation Scheme.
A compensation committee (the Committee) will be appointed to determine claims, which will comprise at least 12 members of the Board of Directors of the Company.
None of the Committee will be Principals in Licensed Firms of former authorised firms, and at least a quarter of them must not be accountants.
When a claim is received, the Chairman of the Committee appoints a Panel of at least 3 Committee members, one of whom will not be an accountant, to determine the claim.
A claim is only successful if the Committee is satisfied that the following requirements have been met:
A claim may be rejected by the Committee if:
The amount you can recover under the Compensation Scheme is capped at £50,000, exclusive of any interest payable.
There are specific rules relating to interest under the Compensation Scheme.
It is important to note that a claimant is not usually entitled to recover any costs related to making a claim under the Compensation Scheme.
Making a claim under the Scheme can be complicated and stressful. Our Commercial Litigation Team and Financial Services Team are here to help and have experience dealing with claims under the ICAEW scheme.