High Court refuses to strike out negligence claim despite contractual disclaimer

A High Court Master has refused to strike out, or give summary judgment on, a claim by the buyers of a company alleging that accountants who prepared the completion accounts for the sale breached a duty of care to them in failing to detect an alleged fraud on the company. On the facts of the case, it was arguable that the presence of a disclaimer in the accountants’ contractual documentation did not preclude the claim: Amathus Drinks PLC & Ors v EAGK LLP & Anor [2023] EWHC 2312 (Ch).

The effectiveness of appropriately worded disclaimers is often a key issue in financial services litigation. This decision will therefore be of interest as an example of a factual scenario where it was found that a contractual disclaimer of responsibility to third parties did not necessarily preclude a claim for negligence misstatement.

As a Master’s decision, this decision will not bind other courts. However, the judgment illustrates that, while a contractual disclaimer will be a powerful factor in determining whether the maker of a statement has assumed responsibility toward a third party, it is not a panacea and will not always be determinative where there are factors which point in the other direction, such as the sophistication of the parties and any direct communication between them. In this case, the court emphasised that there were direct communications between the auditor and the third party. In its view, the nature and extent of those communications, and their relevance to whether on the facts there was an assumption of responsibility, was a matter to be explored at trial.

For a more detailed analysis of the decision, please see our Litigation Notes blog post.