Accountants, lawyers and other professionals could be made personally liable for advice given on behalf of their employers, law firm CMS Cameron McKenna warns.
It follows the case of surveyor John Babb, who has been found liable for a mortgage valuation he carried out seven years ago after his former employer went bust.
The Royal Institute of Chartered Surveyors (RICS), which supported Babb, expressed dismay at the decision.
Its chief executive John Armstrong said: “Babb found himself in a thoroughly invidious position. The RICS has many members working in small practices who may be similarly at risk.”
Babb's legal advisers, law firm CMS Cameron McKenna, said the decision by the court of appeal could have widespread implications for other professions such as accountants and solicitors.
It said professional employees would be particularly vulnerable where their company had ceased trading and had no run-off cover.
Professionals could also be vulnerable if the firm is underinsured or unable to obtain professional indemnity cover because of a coverage dispute.
Peter Maguire, a partner in CMS CM, said: “If this majority decision of the court of appeal stands, it will leave all employees that provide specialist advice exposed to personal liability.”
