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Part 16 U.K.Audit

Chapter 6U.K.Auditors' liability

Liability limitation agreementsU.K.

537Effect of liability limitation agreementU.K.

(1)A liability limitation agreement is not effective to limit the auditor's liability to less than such amount as is fair and reasonable in all the circumstances of the case having regard (in particular) to—

(a)the auditor's responsibilities under this Part,

(b)the nature and purpose of the auditor's contractual obligations to the company, and

(c)the professional standards expected of him.

(2)A liability limitation agreement that purports to limit the auditor's liability to less than the amount mentioned in subsection (1) shall have effect as if it limited his liability to that amount.

(3)In determining what is fair and reasonable in all the circumstances of the case no account is to be taken of—

(a)matters arising after the loss or damage in question has been incurred, or

(b)matters (whenever arising) affecting the possibility of recovering compensation from other persons liable in respect of the same loss or damage.