KPMG is considering appealing against a landmark High Court ruling which found that accountants owe a duty of care to the Law Society when auditing solicitors' accounts, writes Lucinda Kemeny. The decision, which opens the gateway for other regulators to sue accountancy firms, follows four years of wrangling after Sussex-based solicitors Durnford Ford senior partner, Graham Durnford, was convicted of a massive theft which was undiscovered in the company's annual audit. The society was forced to pay out £8.5m from its compensation scheme to clients of the firm and launched a £7.4m negligence claim against KPMG to recover its money. At a hearing which has already cost the firm hundreds of thousands of pounds, KPMG contested the Law Society's right to demand a duty of care which it said was owed only to the client. But vice-chancellor Sir Richard Scott dismissed this and refused the firm right of appeal. A Law Society spokesman said: 'We are not declaring open season on accountants but we want to recover our losses.' Law Society regulations require solicitors to file annual accounts and the spokesman said it was right that it should expect a duty of care from accountancy firms. KPMG, which said that the judgement did not prove that it had been negligent, is currently taking legal advice on an appeal. It was given 28 days to do so.
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