Tuesday 16 December 2003 - News - Miscellaneous
Consultation on director and auditor liability
Options for a "radical
overhaul" of directors' and auditors' liability were unveiled today
by the Department of Trade and Industry.
Secretary of State for Trade & Industry, Patricia Hewitt, said the move was designed to "maintain an effective and competitive audit market alongside a diverse, talented and willing pool of potential company directors."
This consultation looks only at civil liability and does not seek to protect against criminal misconduct such as fraud, said the DTI.
The exercise is seeking opinion on a range of measures, including allowing companies to limit the liability of directors against claims for negligence. It also looks at issues such as the availability of directors' liability insurance, the position of non-executive directors and case management by the courts.
The key auditor-related issue in the consultation document is whether auditors should be allowed to contract with their clients to limit their liability.
Patricia Hewitt added: "We do not want regulations that are so stringent, complex or unclear that honest, capable people are put off being directors or auditors. Equally the law must be firm and robust to deal fairly with cases where something has gone wrong, as a result of either negligence or dishonesty."
The consultation period closes on 12 March 2004 and will inform on going work on company law reform.
Angie Bell
Secretary of State for Trade & Industry, Patricia Hewitt, said the move was designed to "maintain an effective and competitive audit market alongside a diverse, talented and willing pool of potential company directors."
This consultation looks only at civil liability and does not seek to protect against criminal misconduct such as fraud, said the DTI.
The exercise is seeking opinion on a range of measures, including allowing companies to limit the liability of directors against claims for negligence. It also looks at issues such as the availability of directors' liability insurance, the position of non-executive directors and case management by the courts.
The key auditor-related issue in the consultation document is whether auditors should be allowed to contract with their clients to limit their liability.
Patricia Hewitt added: "We do not want regulations that are so stringent, complex or unclear that honest, capable people are put off being directors or auditors. Equally the law must be firm and robust to deal fairly with cases where something has gone wrong, as a result of either negligence or dishonesty."
The consultation period closes on 12 March 2004 and will inform on going work on company law reform.
Angie Bell
