PracticeAccounting FirmsSmith sets stage for liability cap

Smith sets stage for liability cap

In a groundbreaking speech made at the ICAEW conference in London today, DTI minister Jacqui Smith has opened the door for firms to negotiate individual liability agreements with their audit clients.

Link: Special report: Liability cap

Smith has instructed the Office of Fair Trading to undertake an inquiry into the competition issues.

In the clearest indication yet that Section 310 of the Companies Act 1985, which denies firms the right to negotiate individual liability caps on a case by case basis, will be repealed, Smith asked for the OFT review to be completed by the end of July.

If the OFT agrees that there is no conflict, Smith aims to put forward the final legislation into the Companies Bill, which is passing through parliament.

More to follow.

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