Accountants prepared audited accounts knowing that the company was in financial difficulties, and the the accounts would be relied upon by the plaintiffs.
Held: The accountants owed a duty of care to the plaintiffs. They knew that they would rely upon the accounts. However in this case, the plaintiffs would have proceeded in any event, and so the negligence did not cause any of the damage actually suffered. ‘as long as the misrepresentation plays a real and substantial part, though not by itself as decisive part, in inducing the plaintiff to act, it is a cause of his loss and he relies on it, no matter how strong or how many are the other matters which play their part in inducing him to act . . ‘.
Judges:
Stephenson LJ
Citations:
[1981] 3 All ER 289
Jurisdiction:
England and Wales
Cited by:
Distinguished – Caparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .
Cited – Axa Insurance Co Ltd v Swire Fraser Ltd CA 9-Dec-1999
Where an action was commenced before the new rules came into effect, but an application to strike out an action was issued and decided after they came into effect, that application could not be decided under the old rules. The new rules applied . .
Cited – DP Mann and others v Coutts and Co ComC 16-Sep-2003
The claimants were involved in litigation, They took certain steps on the understanding that the respondents had had deposited with them substantial sums in accounts under binding authorities. The bank had written a letter upon which they claim they . .
Cited – Assicurazioni Generali Spa v Arab Insurance Group (BSC) CA 13-Nov-2002
Rehearing/Review – Little Difference on Appeal
The appellant asked the Court to reverse a decision on the facts reached in the lower court.
Held: The appeal failed (Majority decision). The court’s approach should be the same whether the case was dealt with as a rehearing or as a review. . .
Lists of cited by and citing cases may be incomplete.
Professional Negligence
Updated: 23 June 2022; Ref: scu.180651