C2Part 16Audit
Chapter 6Auditors' liability
Liability limitation agreements
C1I1535Terms of liability limitation agreement
1
A liability limitation agreement—
a
must not apply in respect of acts or omissions occurring in the course of the audit of accounts for more than one financial year, and
b
must specify the financial year in relation to which it applies.
2
The Secretary of State may by regulations—
a
require liability limitation agreements to contain specified provisions or provisions of a specified description;
b
prohibit liability limitation agreements from containing specified provisions or provisions of a specified description.
“Specified” here means specified in the regulations.
3
Without prejudice to the generality of the power conferred by subsection (2), that power may be exercised with a view to preventing adverse effects on competition.
4
Subject to the preceding provisions of this section, it is immaterial how a liability limitation agreement is framed.
In particular, the limit on the amount of the auditor's liability need not be a sum of money, or a formula, specified in the agreement.
5
Regulations under this section are subject to negative resolution procedure.
Pts. 1-39 (except for Pt. 7 and ss. 662-669), 45-47 extended (12.5.2011) by The Companies Act 2006 (Consequential Amendments and Transitional Provisions) Order 2011 (S.I. 2011/1265), art. 5(1), Sch. 1 para. 2