It is never a good time to hear you and/or your firm are the subject of civil litigation after providing professional services to clients; however, you should understand what you need to do should you find yourself in this undesirable situation.
The first course of action is to notify your insurance carrier and/or attorney to assist you in addressing the matter. You also must eventually notify the Nebraska Board of Public Accountancy (State Board) on your annual and/or firm renewals. If completing online renewals, you will be directed to provide a written summary and any current pleadings in the matter to the State Board office.
Why is the State Board interested in your civil suit? Below are several frequently asked questions to assist you and/or your firm in understanding the State Board’s position when it comes to civil litigation.
Questions & Answers
Q: I have been named in a civil lawsuit by a former client regarding my professional practice and am working with my attorney on the matter. What are my obligations to the State Board?
A: First, make sure you properly complete your next renewal application for your permit to practice. One of the application questions will ask if you and/or your firm has been named in a civil lawsuit since your last application. Make sure you check the box “yes” and provide a summary explanation of the matter. This could include the status of the lawsuit, where the litigation was filed, any pleadings filed with the court, and other pertinent information.
Q: Why is the State Board involved in civil litigation?
A: The State Board’s main responsibility is to ensure regulations within the Rules of Professional Conduct (found within the Nebraska Administrative Code (NAC) Title 288, Chapter 5) have not been violated in the matter. In the vast majority of cases the State Board will remain an interested third party and will offer you and/or the firm a Litigation Monitoring Consent Order (LMCO) so the State Board can move to the sidelines and let you and your attorney focus on the litigation. You will also receive a telephone call from State Board staff overviewing any initial comments from the Board’s Enforcement Committee (EC) and to answer any questions regarding the LMCO or other concerns.
Q: I have agreed to settle the matter through my attorney. What now?
A: Normally, the EC will request the settlement for review. Under State Board regulations, the settlement remains confidential during the investigation. The settlement is reviewed by the State Board’s attorney and the EC to determine if any further information will be required from you and/or the firm. This might include any actions you and/or the firm has taken since the settlement to defer future problems.
Q: The court dismissed the matter for lack of evidence or ruled in my and/or the firm’s favor. What now?
A: In most cases, the State Board will then close the matter.
Q: The court and/or jury ruled in favor of the plaintiff. What now?
A: As agreed within the LMCO, it is your and/or the firm’s responsibility to keep the State Board office apprised of the actions of the court. Telephone or email the State Board office with the results of the matter. Normally, the pleadings in the case will be reviewed by the State Board’s attorney and the EC to determine if any further actions should be taken. This could include a further response to the EC by you and/or the firm to clarify any matters that could be considered a possible violation of the Rules of Professional Conduct as noted within the pleadings.
Q: Should I prepare for disciplinary proceedings before the State Board?
A: Normally no; however, you may need to prepare for disciplinary proceedings before the State Board if you and/or the firm:
- Do not cooperate with the State Board’s requests for information.
- There is direct evidence in the pleadings and/or judgement of the court involving potential violations of the Rules of Professional Conduct.
If any disciplinary proceedings are taken, you and/or the firm will have every opportunity to defend your actions before the State Board as outlined within the regulations in NAC Title 288, Chapter 4.
The Nebraska Board of Public Accountancy administers public accountancy law in Nebraska. Never hesitate to contact the State Board office with any questions regarding enforcement and/or disciplinary proceedings. For more information,
visit www.nbpa.ne.gov. Dan Sweetwood is executive director of the State Board. You may contact him at (402) 471-3595 or dan.sweetwood@nebraska.gov.
