Fraud, Constructive Fraud, and Negligence
Lesson:
When things go wrong, accountants and others may be sued.
People immediately jump to the word 'fraud,' but there are actually several closely related accusations that may arise.
- Fraud - Knowingly taking advantage of a client
- Constructive Fraud - Taking advantage of a client without malicious intent
- Gross negligence - Recklessly disregarding the client's needs
You just received word that a client is about to get sued, and you're trying to figure out what she might be facing.
Here are the relevant facts:
- It was clear that the service provider had reckless disregard for her client.
What type of legal action should be expected?
Answer:
- This is a case of gross negligence.