Liability of auditors

Abstract

The House of Lords' landmark decision in Caparo Industries v. Dickman (1990) appeared to give auditors substantial protection from negligence suits by holding that auditors generally do not have responsibility to 3rd parties who rely on statutory accounts in deciding whether to buy shares or bid for a company. The High Court's decision in ADT Ltd. v. BDO Binder Hamlyn (1995) showed that the decision in Caparo will not always protect auditors against claims by 3rd parties.