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Accountants
were liable for the loss of chance to obtain anticipated savings in
relation to the operation or otherwise of a profit related pay scheme.
The defendant,
Price Waterhouse, admitted that it gave negligent advice as a result
of misinterpreting the Finance Act 1995 in relation to profit related
pay (PRP) schemes. The principal issue was one of causation as to what
damage the claimant, Keele University, had sustained by reason of the
admitted negligence.
The court
had to decide what Keele University would have chosen to do had it received
correct advice - the rational response would have been to have had contingency
planning with a view to opting-out of the PRP scheme after a relatively
short period of time. Opt-out had a substantial chance of success. The
loss of the chance to obtain savings in that way was therefore a direct
result of Price Waterhouse's negligence and was included in the matters
for which Price Waterhouse had expressly accepted liability.
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