Caparo Industries Plc v Dickman (1990) established that auditors owe no duty of care to shareholders or potential investors for the accuracy of company accounts, while limiting auditors' liability to shareholders collectively, not individually or to potential investors.
This case law note has been reviewed by a law tutor
🏛️ Court: House of Lords 🗓️ Judgment Date: 8 February 1990 🗂️ Where Reported: [1990] 2 A.C. 605; [1990] 2 W.L.R. 358; [1990] 1 All E.R. 568 📍 Jurisdiction: United Kingdom
Duty of Care Limitation: The case established that auditors do not owe a duty of care to individual shareholders or potential investors, but only to the company as a whole. The decision clarified that auditors’ duty of care is limited to the company's shareholders for specific purposes and does not extend to outside investors making investment decisions based on the audited accounts.
