Law Society extends its KPMG negligence claims

The Law Society has made fresh allegations against accountancy firm KPMG of negligence relating to its auditing of law firm Durnford Ford's accounts.

The society was forced to pay out millions of pounds in compensation to clients when the firm was closed by the Solicitors Complaints Bureau in 1992 and senior partner Graham Ford was jailed for theft.

It has been suing KPMG, in particular partners Stephen Cawley and Neil Chapman, for £8.5m over the past three years, claiming that audits of the firm between 1985 and 1990 were negligent and that they had failed to spot hundreds of anomalous financial transactions.

The Law Society's new writ, issued by Wright Son & Pepper, extends the period of alleged negligence from 1 June 1990 to 31 May 1991, and claims “negligent misstatement arising from a report made pursuant to s.34 of the Solicitors Act 1974” between those dates.

Dave McNeil, spokesman for the Law Society, said he could not comment further on what was “an extremely complex and technical case.”

A spokesman for KPMG said: “This is long standing legal action and has been contested throughout and will continue to be so.”

The case is expected to go to trial in six months.