Accountant and duty of care

1) I didn’t say that! I said that it USED to be the case that banks could hide behind a wide exclusion clause. Whether that is the same now, I really don’t know

2) I don’t know the case – in fact, I don’t know any cases where the plaintiff and the defendant are referred to only by their initials

Sorry

I don’t think that I can add much to the summary given by Lord Neill!

Here it is and it sets out very clearly why the duty of care was deemed not to exist in McNaughton’s case

“Lord Neill set out six headings to establish liability: ‘(1) the purpose for which the statement was made. (2) the purpose for which the statement was communicated . (3) the relationship between the advisor, the advisee and any relevant third party. (4) the size of any class to which the advisee belongs. (5) the state of knowledge of the advisor. (6) reliance by the advisee.’
Ratio ‘from this scrutiny it seems to me to be clear (a) that in contrast to developments in the law in New Zealand, of which the decision in Scott Group Ltd -v- McFarlane [1978] 1 NZLR 553 provides an important illustration, in England a restrictive approach is now adopted to any extension of the scope of the duty of care beyond the person directly intended by the maker of the statement to act upon it; and (b) that in deciding whether a duty of care exists in any particular case it is necessary to take all the circumstances into account; but (c) that, notwithstanding (b), it is possible to identify certain matters which are likely to be of importance in most cases in reaching a decision as to whether or not a duty exists. I propose to examine these matters under a series of headings, though the headings involve a substantial measure of overlap. (1) The purpose for which the statement was made. In some cases the statement will have been prepared or made by the ‘adviser’ for the express purpose of being communicated to the ‘advisee’, to adopt the labels used by Lord Oliver. In such a case it may often be right to conclude that the advisee was within the scope of the duty of care. In many cases, however, the statement will have been prepared or made, or primarily prepared or made, for a different purpose and for the benefit of someone other than the advisee. In such cases it will be necessary to look carefully at the precise purpose for which the statement was communicated to the advisee. (2) The purpose for which the statement was communicated. Under this heading it will be necessary to consider the purpose of, and the circumstances surrounding, the communication. Was the communication made for information only? Was it made for some action to be taken and, if so, what action and by whom? Who requested the communication to be made? These are some of the questions which may have to be addressed.
(3) The relationship between the adviser, the advisee and any relevant third party.
Where the statement was made or prepared in the first instance to or for the benefit of someone other than the advisee it will be necessary to consider the relationship between the parties. Thus it may be that the advisee is likely to look to the third party and through him to the adviser for advice or guidance. Or the advisee may be wholly independent and in a position to make any necessary judgments himself.
(5) The state of knowledge of the adviser. The precise state of knowledge of the adviser is one of the most important matters to examine. Thus it will be necessary to consider his knowledge of the purpose for which the statement was made or required in the first place and also his knowledge of the purpose for which the statement was communicated to the advisee. In this context knowledge includes not only actual knowledge but also such knowledge as would be attributed to a reasonable person in the circumstances in which the adviser was placed. On the other hand any duty of care will be limited to transactions or types of transactions of which the adviser had knowledge and will only arise where ‘the adviser knows or ought to know that [the statement of advice] will be relied upon by a particular person or class of persons in connection with that transaction:’ per Lord Oliver in the Caparo case [1990] 2 A.C. 605, 641. It also necessary to consider whether the adviser knew that the advisee would rely on the statement without obtaining independent advice
(6) Reliance by the advisee
In cases where the existence of a duty of care is in issue it is always useful to examine the matter from the point of view of the plaintiff. As I have ventured to say elsewhere the question ‘Who is my neighbour?’ prompts the response ‘Consider first those who would consider you to be their neighbour.’ One should therefore consider whether and to what extent the advisee was entitled to rely on the statement to take the action that he did take. It is also necessary to consider whether he did in fact rely on the statement, whether he did use or should have used his own judgment and whether he did seek or should have sought independent advice. In business transactions conducted as arms’ length it may sometimes be difficult for an advisee to prove that he was entitled to act on a statement without taking any independent advice or to prove that the adviser knew, actually or inferentially, that he would act without taking such advice.’ ”

That seems pretty clear to me, but I’m struggling to see how it could be asked as a mcq in F4

OK?