Profile: Nick Eastwell

Post-Transparency Directive - Liability for Reports and Statements

Historically there was no statutory regime conferring a right to compensation on shareholders and investors for errors in, and omissions from, a company’s financial statements, and the common law of torts had to be relied upon in any such action. It is generally accepted, applying the principles laid down by the House of Lords in Caparo Industries plc v Dickman (which concerned the liability of auditors), that directors have a duty of care to shareholders as a whole to enable them to exercise their governance rights but not, in the absence of circumstances creating proximity or a special relationship, to individual shareholders in relation to their investment or to potential investors or other third parties.

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