Duty of Care Auditor in UK Law

Leading Cases
  • Man Nutzfahrzeuge AG and another v Freightliner Ltd and Others
    • Queen's Bench Division (Commercial Court)
    • 28 Octubre 2005

    One can see here a reflection of the principles governing the measure of damages recoverable in cases of this kind.

  • Caparo Industries Plc v Dickman
    • House of Lords
    • 08 Febrero 1990

    What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of "proximity" or "neighbourhood" and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other.

    It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless.

    It has to be borne in mind that the duty of care is inseparable from the damage which the plaintiff claims to have suffered from its breach. It is not a duty to take care in the abstract but a duty to avoid causing to the particular plaintiff damage of the particular kind which he has in fact sustained.

    Only where the auditor was aware that the individual shareholder was likely to rely on the accounts for a particular purpose such as his present or future investment in or lending to the company would a duty of care arise.

  • Caparo Industries Plc v Dickman
    • Court of Appeal (Civil Division)
    • 29 Julio 1988

    He naturally, and rightly, regards the company as his client. It is attached to and forms part of the company's accounts (ss.238 (3) 239). A copy of the company's accounts (including the auditor's report) must be sent to every member (s.240). Any member of the company, even if not entitled to have a copy of the accounts sent to him, is entitled to be furnished with a copy of the company's last accounts on demand and without charge (s.246).

  • Galoo Ltd and Others v Bright Grahame Murray
    • Court of Appeal (Civil Division)
    • 21 Diciembre 1994

    A mere foreseeability that a potential bidder may rely on the audited accounts does not impose on the auditor a duty of care to the bidder, but if the auditor is expressly made aware that a particular identified bidder will rely on the audited accounts or other statements approved by the auditor, and intends that the bidder should so rely, the auditor will be under a duty of care to the bidder for the breach of which he may be liable.

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Legislation
  • Coronavirus (Scotland) Act 2020
    • Scotland
    • 1 de Enero de 2020
    ...... (3) Section 133 (Principal Reporter’s duty to initiate review) has effect as if— . (a) .... (9) The Act of Sederunt (Child Care and Maintenance Rules) 1997 ( S.I. 1997/291) ..., the Scottish Ministers must consult the Auditor General for Scotland. . (5) Regulations under ......
  • Local Government (Wales) Measure 2009
    • Wales
    • 1 de Enero de 2009
    ....... General duty General duty . S-2 . General duty in relation ... . . (b) the Auditor General for Wales, and. . . (c) such other ... 93, 94 and 95 of the Health and Social Care (Community Health and Standards) Act   2003 (c. ......
  • Public Audit (Wales) Act 2004
    • UK Non-devolved
    • 1 de Enero de 2004
    ...... An Act to confer further functions on the Auditor General for Wales; to make provision about the ...70). (delegation of functions) applies to a duty imposed on a body by this. section. . (9) This ...Care (Community Health and Standards) Act 2003 (c. ......
  • Parliamentary Voting System and Constituencies Act 2011
    • UK Non-devolved
    • 1 de Enero de 2011
    ...... . (5) In discharging the duty imposed by sub-paragraph (1) or (2) an officer ... paragraph 21, to the county court or Auditor. . (4) An order under sub-paragraph (1) may ... for the inspection of counted ballot papers, care must be taken to avoid disclosing the way in ......
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Books & Journal Articles
  • Government rejects auditor liability cap.
    • Nbr. 2004, June 2004
    • Financial Management (UK)
    • Regulations Update
    ...... bring forward amendments to the current bill to extend an auditor's duty of care." . Although many of the bill's provisions do address auditors' ......
  • Auditors' Liability for BCCI
    • Nbr. 1-4, January 1994
    • Journal of Financial Crime
    • 306-315
    In an earlier contribution to this journal, the author sought to analyse the legal implications of the recent decision by the liquidators of the Bank of Commerce and Credit International (BCCI), To...
    ...... have indicated that BCCI was in trouble and that, as a result, a duty of care was owed to existing depositors and to potential inves-tors. An ......
  • NEGLIGENCE LAW SUITS AND THE ACCOUNTANT
    • Nbr. 1-4, February 1993
    • Journal of Financial Regulation and Compliance
    • 403-407
    The paper argues that increasing litigation and expanding claims on both sides of the Atlantic are threatening the survival of even the largest accounting practices. In the UK, firms are so concern...
    ...... risky areas of practice, such as antenatal care, or are indulging in defensive — and costly — ...But any profession where a duty of care can be held to exist has had its share of ...In practice, this means that a company's auditors are generally brought into a case in which fraud ......
  • After Caparo— Liability in Business Transactions Revisited
    • Nbr. 54-5, September 1991
    • The Modern Law Review
    ...... opinion, will be unable to sue the auditor for any 10sses.~ Given the range of ...duty of care to any bank which might rely ......
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Law Firm Commentaries
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Forms
  • Chapter CH231300
    • HMRC Guidance manuals
    • Formularios de Derecho Civil, Mercantil y Registral
    ...... area and it should be approached with great care. You are most likely to seek access to them where ... information’ and audit matters or tax/duty advice, you are entitled to access the ... the auditor or tax adviser has assisted in the preparation or ......
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