Investors are willing to listen to the idea of proportionate liability, but insist that the concept needs to be explored fully over a greater period of time.
‘Most investors have sympathy with accountants over proportionate liability, but it is important when taking this forward that it is looked at in the right context and in relation to the quality of audit,’ said Iain Richards, head of governance at Morley Fund Management.
‘We are keen on this being picked up in the main companies bill in 2006. This would allow time to work through all the issues.’
‘The issue is far too complicated to push through at such short notice,’ said another investor. ‘There are many legal aspects that need to be resolved before this is contemplated.’
Accountants have already made representations to DTI minister Jacqui Smith to push for revised legislation that would allow them to limit their liability on a case-by-case basis.
The bill reaches report stage next week, after which no further amendments can be made.
Investor efforts to play for more time follow a successful campaign to block the introduction of a liability cap.
A combination of Treasury and investment community opposition resulted in the government’s decision to hold back on a cap.
A DTI spokeswoman hinted the tight timescale could prove troublesome for changes to the current bill, and Smith herself said in a recent parliamentary committee debate that proportionate liability ‘raises questions we need to work through with companies, auditors and investors’.