Question
Caparo Industries plc v Dickman and others [1990] 2 AC 605
Facts: The key question in this case was whether the defendants (auditors) owed a duty of care to potential investors (plaintiffs), who made a successful takeover bid for a company, based on the erroneous accounts of the auditors. The issue was whether the auditors owed a duty of care to shareholders or potential investors, to carry out an audit using reasonable care and skill. The Court of Appeal held that [...]. The auditors appealed to the House of Lords against the decision that they owed a duty of care to shareholders. The respondents also appealed (a cross-appeal) to the House of Lords against the decision that no duty was owed to them as potential investors. The appeal was allowed and the cross-appeal dismissed