Lawyers said this week that the clauses should be used after the Freightliner case, in which Ernst & Young, while escaping liability, was told it had a special duty towards the accounts of a subsidiary sold by a client.

The subsidiary, ERF, was sold to German truckmaker MAN. When fraud was uncovered at ERF, the German group sued and won damages against Freightliner, the effective former owner.

The Court of Appeal ruled that E&Y was not liable in the case, but added there was a potential issue about auditors signing off accounts that a company hopes to use in order to sell a business.

Lovells partner Nicholas Heaton said: ‘Knowing the accounts are going to be used isn’t enough to subject an auditor to a special duty of care.

‘But the comment by the Court of Appeal raises the point that even if auditors provide audited accounts ­ and know they’re going to be used as part of negotiations for the sale of a company ­ they then owe a duty of care to shareholders. They are then liable for losses if shareholders suffer from a breach of warranty they give regarding the accuracy of the reports.’

Hardeep Nahal of Herbert Smith said that although E&Y had not used disclaimers in this case, firms should do so in future to guard against the liability. But there was some comfort in the judgment for auditors.

‘The test makes it potentially harder to impose liability on the auditor. The judgement says that there must be some indication from an auditor that a third party can rely on an audit, which shows that the auditor has to assume responsibility for the accuracy of an audit report for purposes of another transaction.

‘Previously the debate was about whether the auditor had to know a third party was going to rely on an audit report for a transaction and knowledge was regarded as key.
According to Nahal, the Court of Appeal says ‘the implication of this test is that “something more” than knowledge has to be shown, but it hasn’t defined what this is’.