The applicant company employed a trader who, through manipulation of trading systems ran up losses sufficient to bankrupt the company. They sought recovery from the defendant auditors for failing to spot the mis-trading and prevent continuing losses. In a preliminary hearing, the court heard that certain settlements had been agreed between some of the parties, and a stay was sought. The remaining party stated its intention to claim contributions from the defendant parties who had reached settlements. It sought in this hearing certain claims to be struck out as badly pleaded. In particular they said the claim in negligent mis-statement required evidence that the losses suffered arose from use of the statements for the purposes intended. A further defence related to reliance by the auditors on statements made by the directors that all pertinent information had been made available.
Mr. Justice Evans – Lombe
[2001] EWHC Ch 461
Bailii
England and Wales
Citing:
Cited – Galoo Ltd and Others v Bright Grahame Murray CA 21-Dec-1993
It is for the Court to decide whether the breach of duty was the cause of a loss or simply the occasion for it by the application of common sense. A breach of contract, to found recovery, must be shown to have been ‘an ‘effective’ or ‘dominant’ . .
Cited – Johnson v Gore Wood and Co HL 14-Dec-2000
Shareholder May Sue for Additional Personal Losses
A company brought a claim of negligence against its solicitors, and, after that claim was settled, the company’s owner brought a separate claim in respect of the same subject-matter.
Held: It need not be an abuse of the court for a shareholder . .
Cited – Prudential Assurance Co Ltd v Newman Industries Ltd (No 2) CA 1982
A plaintiff shareholder cannot recover damages merely because the company in which he has an interest has suffered damage. He cannot recover a sum equal to the diminution in the market value of his shares, or equal to the likely diminution in . .
Lists of cited by and citing cases may be incomplete.
Professional Negligence, Torts – Other
Updated: 23 December 2021; Ref: scu.167099
