Binder judgment underlines case for reform
Thursday 07 December 1995
Well, almost. This case is complicated by the fact that much of Binder Hamlyn has, since late 1994, been part of the immensely successful US- based Arthur Andersen. Having acquired it because of its UK audit business, Arthur Andersen is unlikely to want to cast the Binder people off. But nor, as rival firms were quick to point out, is it likely to dip into its pocket to bail them out. That would, in the words of one partner at another practice, be a "more than generous gesture". Ultimately, ADT would probably be better off agreeing a deal under which the money is paid off over time, rather than forcing the partners out of homes and callings.
The wider implications are somewhat easier to assess. Irrespective of the final result, the case can only accelerate the rush to incorporate begun earlier this year by KPMG, Britain's largest audit firm. Indeed, the signs are that the coming weeks, if not days, will see many other leading firms delivering their responses to KPMG's attempt to protect itself from huge negligence suits in this way.
There are still doubts over how KPMG's decision to incorporate only its audit arm will work. If Binder had been totally incorporated at the time of the deal that landed it in court, the liability would have been limited to the firm's assets, and the individual partner responsible, rather than scores of others with no connection to the transaction. Even this may be no more than a partial solution, however.
With this case fresh in its mind, the profession will be hoping that the Law Commission, which is studying options for reform of the law of joint and several liability, might provide a more elegant way out of the problem. It has long pressed changes to a principle under which its members can find themselves bearing the whole cost of a corporate disaster.
Malaysia Airlines plane crash exposes alarming flaw in airline security: over one billion flights made last year without stolen-passport check
International Women's Day 2014: The shocking statistics that show why it is still so important
Teacher shows sex tape featuring herself to pupils during class by mistake
Swarm of killer bees sting woman 1,000 times
Dead woman's body found sitting in a car after six years after direct debits ran $54,000 bank account dry
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
- 1 International Women's Day 2014: The shocking statistics that show why it is still so important
- 2 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 3 Teacher shows sex tape featuring herself to pupils during class by mistake
- 4 Singapore sting: Sky-high prices are pushing locals to the edge of affordability
- 5 Swarm of killer bees sting woman 1,000 times
iJobs Money & Business
£42000 - £45000 per annum + Benefits: Pro-Recruitment Group: Big 4 - Specialis...
£500 - £600 per day: Harrington Starr: Agile Scrum Master Certified Scrum Mast...
£45000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: A leading prov...
£50000 - £60000 per annum + Bonus and Benefits: Harrington Starr: Harrington S...