Criteria for Professional Negligence Actions Against Accountant Not in Privity with Plaintiff and Against Actuary

The Second Department explained the criteria for professional negligence actions against an accountant, with whom the plaintiffs were not in privity, and against an actuary:

Accountants may be “held liable in certain circumstances for negligent misrepresentations made to parties with whom they have no contractual relationship, but who have relied to their detriment on inaccurate financial statements prepared by the accountant” … . In order to establish such liability, the relationship between the accountant and the party must be found to approach privity, through a showing that the following prerequisites are satisfied: “(1) the accountants must have been aware that the financial reports were to be used for a particular purpose or purposes; (2) in the furtherance of which a known party or parties was intended to rely; and (3) there must have been some conduct on the part of the accountants linking them to that party or parties, which evinces the accountants’ understanding of that party or parties’ reliance” … . *  *  *

Because an actuary is not required to be licensed, is not regulated, and is not subject to a State-created disciplinary system, an actuary is not a “professional” for purposes of a malpractice cause of action … . Nevertheless, an actuary, possessing special knowledge, can be held liable for the negligent performance of its services …. [T]he complaint sufficiently alleges a cause of action against [the actuary] on a theory of common-law negligence ….  Health Acquisition Corp v Program Risk Mgt, Inc, 2013 NY Slip Op 02714, 2nd Dept, 4-24-13