Lauren Rosenberg is suing Google because the walking directions she got via her Blackberry and Google Maps put her onto a busy road where she got hit by a car.
On its version for computers, Google Maps suggests one alternative for Rosenberg's route. It also highlights a disclaimer: "Use caution — This route may be missing sidewalks or pedestrian paths."
The mobile version of Google Maps, however, does not come with that warning.
Other warnings designed to place personal responsibility where it naturally belongs:
On matches: "Caution: Contents may catch fire."
On a mattress: "Do not attempt to swallow."
On a kitchen knife: "Keep out of children."
Where do we draw the line in the sand between personal responsibility for our actions and blaming others for our actions?
Accountants play an essential role in verifying the accuracy of financial statements. We are "public watchdogs" that assure the public that "financial statements are free from material misstatement.'
The Supreme Court affirmed the public interest nature of auditing in United States v. Arthur Young & Co. The Court ruled that:
by certifying the public reports that collectively depict a corporation's financial status, the independent auditor assumes a public responsibility transcending any employment relationship with the client. The independent public accountant performing this special function owes ultimate allegiance to the corporation's creditors and stockholders, as well as to the investing public. This 'public watchdog' function demands that the accountant maintain total independence from the client at all times and requires complete fidelity to the public trust...
We don't deny our 'public watchdog' function; however, auditing firms are often the main focus of legal action where a corporate fraud has taken place, even if they have had little direct responsibility for the fraud. This is because they have insurance coverage for legal action of this kind, and their financial resources are therefore greater than those of others implicated in the fraud. Therefore, accountants often claim they are sued because they have deep pockets, not because of bad audits.
Litigation against the profession is governed by the doctrine of joint and severable liability. The doctrine of joint and several liability makes each defendant fully liable for all assessed damages in a case, regardless of the degree of fault. In practical terms this means that, even with no evidence of culpability, a company's independent auditors are almost certain to be named in any action filed against that company alleging financial fraud for no reason other than the auditors' perceived deep pockets or because they are the only potential defendant that is still solvent.
The liability burden cannot be measured only in dollars and cents. Other effects are less easy to detect, but are no less costly. For example, groups targeted by frequent litigation now practice risk reduction as a matter of professional survival. Doctors, for instance, are avoiding such fields as gynecology and obstetrics. The result is a scarcity of practitioners in crucial specialties.
Abusive and unwarranted litigation is a problem not just for the accounting profession but also for business and the economy generally. One obvious effect is what the media has called the "tort tax" - that is, the increased cost of goods and services caused by runaway litigation. Rosenberg is seeking more than $100,000. Should she prevail, that cost will be passed on to all of us.
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