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Scope of an auditor’s duty, recoverable loss under SAAMCO, and application of loss of chance (Assetco plc v Grant Thornton UK LLP)

Scope of an auditor’s duty, recoverable loss under SAAMCO, and application of loss of chance (Assetco plc v Grant Thornton UK LLP)
Published on: 07 September 2020
Published by: LexisPSL
  • Scope of an auditor’s duty, recoverable loss under SAAMCO, and application of loss of chance (Assetco plc v Grant Thornton UK LLP)
  • What are the practical implications of this case?
  • What was the background?
  • What did the court decide?
  • Case details

Article summary

Dispute Resolution analysis: The Court of Appeal has clarified the principles of SAAMCO and the approach to loss of a chance in an auditor’s negligence case. The court explained that SAAMCO was not a rigid rule of law, but a tool for determining which losses fell within the scope of duty. It was held that the losses suffered by the company following an audit that negligently failed to detect false accounting was within the scope of the auditor’s duty. Where the judge had identified contingencies on which the losses were calculated as more than 90% likely, he was entitled to treat them as near certainties and make no deductions for loss of a chance. The Court of Appeal also considered the extent to which benefits said to have been received as a result of the negligence could be deducted from the damages awarded. Written by David Juckes, barrister, at Hailsham Chambers. or take a trial to read the full analysis.

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