Cap liabilities, say accountants

ACCOUNTANCY firms have stepped up their campaign for a change in the law to protect them from being wiped out by massive lawsuits.

Trade Secretary Patricia Hewitt returns from holiday this week under renewed pressure to cap damages for negligence or incompetence in auditing clients' books.

She will be told that the current position of unlimited liability could result in a major accounting practice going under.

A £2.4bn lawsuit brought by the new management of troubled life assurance group Equitable Life against its auditor, Ernst & Young, has added urgency to the profession's demands.