Independents' Advantage Insurance Company Ltd. v Cook & Anor [2003] EWCA Civ 1103 (24 July 2003)

Independents' Advantage Insurance Company Ltd. v Cook & Anor [2003] EWCA Civ 1103 (24 July 2003)

The pleaded facts, if established, could arguably support the existence of a duty of care owed by the auditors to the claimant as a foreseeable and proximate third party relying on the audited accounts, and the case is not plainly and obviously bound to fail; therefore, the claim should not be struck out or summarily dismissed and should proceed to trial.

Citation
[2003] EWCA Civ 1103
Parties
Claimant/respondent: Independents' Advantage Insurance Company Limited; Defendants/appellants: The Personal Representatives of Michael John Willis Cook (deceased) and another (Mr Colin White-Adams)
Jurisdiction
England and Wales
Judgment Date
24 July 2003
Procedural Posture
Appeal (civil) / Appeal From High Court (chancery Division) to Court of Appeal, Post Interlocutory Application (strike Out/summary Judgment)
Outcome
Appeal dismissed
Legal Topics
Duty of Care, Negligent Misstatement, Strike Out Applications, Summary Judgment, Auditor Liability
Tort Law Professional Negligence Civil Procedure Duty of Care Negligent Misstatement Strike Out Applications Summary Judgment Auditor Liability

Case Brief

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Parties

Independents' Advantage Insurance Company Limited

Claimant/respondent

The Personal Representatives of Michael John Willis Cook (deceased) and another (Mr Colin White-Adams)

Defendants/appellants

Procedural Posture

Appeal (civil) / Appeal From High Court (chancery Division) to Court of Appeal, Post Interlocutory Application (strike Out/summary Judgment)

Legal Issues

  1. 1 Whether the auditors/accountants owed a duty of care at common law to a third party (the provider of bonds/insurance) who relied on audited accounts prepared for a client.
  2. 2 Whether the claim should be struck out or dismissed summarily for disclosing no reasonable grounds or no real prospect of success.

Ratio Decidendi

The pleaded facts, if established, could arguably support the existence of a duty of care owed by the auditors to the claimant as a foreseeable and proximate third party relying on the audited accounts, and the case is not plainly and obviously bound to fail; therefore, the claim should not be struck out or summarily dismissed and should proceed to trial.

Court Disposition

Appeal dismissed

Orders

  • The defendants' appeal against the order of 11 November 2002 is dismissed.
  • The defendants are to pay the claimant's costs of and occasioned by the appeal, such costs to be assessed on a standard basis if not agreed.