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Hannes Snellman Helsinki
The Finnish Supreme Court recently recognized the ambiguous nature of gross negligence both generally and for a company auditor.
Originally, a trial court ordered an auditor to pay damages to the bankruptcy estate of a company audited by him due to his failure to include a notification in his audit report about certain unlawful and detrimental actions taken by a director of the company.
The auditor claimed compensation from his liability insurance company. According to the terms of his policy, compensation could be reduced or denied if the insured had caused the damage by gross negligence. The insurance company claimed gross negligence and declined to pay.
The Court of First Instance held that the insurance company had not proven that the damage resulted from the auditor's intent or gross negligence. The insurance company was adjudged to pay full compensation to the insured auditor. The insurance company appealed.
The...