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MAGNUSSON ADVISES ON A MATTER OF AN AUDITOR'S LIABILITY

2018-01-16

Attorneys Maria Nisell and Per Magnusson from Magnusson counseled in a case concerning an auditor’s liability towards board members in a joint-stock company.

The question was if a careless audit can lead to that board members who have asserted joint liability according to the rules on lack of capital in Chapter 25 of the Swedish Companies Act may be compensated by the auditor according to the provision in Chapter 29, Section 2.

The Supreme Court found that the question regarding liability is determined by whom the applicable liability rule is intended to protect. The Supreme Court emphasized that the protection purpose of the rules on auditing of the company’s bookkeeping does not include the board members whom are responsible for it. The board can thus not blame the auditor for actions they are responsible for. Therefore, the auditor was not liable. The Supreme Court consequently affirmed the judgment of the Court of Appeal.

It is positive that the Supreme Court clarifies the boundaries for how far the liability according to Chapter 29, Section 2 of the Swedish Companies Act stretches, says Maria Nisell and Per Magnusson. It would be unreasonable if board members could lay their own responsibility on the auditor in such a way as attempted in this case. After many years of dispute, it is gratifying that the case had the desired outcome, says the two counsels.

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