Financial Malpractice

Financial Malpractice

As with medical and legal professionals, accountants and other financial professionals can be sued in Illinois for malpractice. See 735 ILCS 5/13-214.2. There are limits to this, however. Generally, an accountant in Illinois is liable for malpractice only to those with whom she contracts, unless her conduct (1) was fraudulent or (2) was for the benefit of a third party and the accountant knew it. 225 ILCS 450-30.1; see Chestnut Corp. v. Pestine, Brinati, Gamer, Ltd., 281 Ill. App. 3d 719, 722–25 (1st Dist. 1996).

To establish a case of financial malpractice, a plaintiff must prove the following: (1) she was owed a duty by the accountant; (2) the accountant breached that duty; (3) the breach proximately caused her injuries; and (4) damages. Cf. Horak v. Biris, 130 Ill. App. 3d 140, 144–45 (stating the elements of a professional malpractice case generally, in this case, for a social worker).

The duty that an accountant or other financial professional owes to her clients is a “very high level of professional responsibility,” a fiduciary duty. Margolies v. Landy & Rothbaum, 136 Ill. App. 3d 635, 638 (3d Dist. 1985); see Miller v. Harris, 2013 IL App (2d) 120512, ¶ 20. Like most cases of professional malpractice, this duty owed by the accountant or financial professional must be defined by an expert at trial and is and is often defined in relation to a typical member of the accounting profession in Illinois. Typical actions that give rise to a financial malpractice claim include failure to disclose financial misconduct, failure to properly accomplish expected tasks such as filing of financial returns, and improper disclosure of information concerning a client’s business or finances. Punitive damages may be available in particularly egregious circumstances, particularly when the malpractice results from abuse of a position of trust or outright malice.

Like most cases involving malpractice, financial malpractice cases can be extremely complicated. The Patterson Law Firm, LLC has a great deal of experience fighting and winning such cases. To speak to one of our lawyers, don’t be afraid to call us at (312) 223-1699 for more advice and information.

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