Law for Business Case Study Example | Topics and Well Written Essays - 1250 words

Law for Business - Case Study Example Finally in respect of creditors of the company the court held the no duty was owed to them. The approach had been criticized by many and had been thought to be unjustified as it was thought that reliance would be placed on the accounts of the company which is indeed due to the auditors’ manuals and other material. However, in favour of the decision a few other points for such a decision are the floodgates argument; the lack of proximity between an auditor and an investor also leads to the conclusion that no claim lies against the auditors; and the placing of undue burden on the auditors and therefore duty is only limited to the company.. (Deakin et al 2008) Another important aspect that was considered in the decision of Caparo for accountants liability as well the standard duty of care requirement was the fact that the three tier test was required to be satisfied so as establish a duty of care. This test was a reformed test for negligence.The first requirement for the establis hment of duty of care was that it must be reasonably foreseeable that the conduct of defendant would cause damage to the claimant. Secondly, there must be sufficient proximity between the parties and finally ‘the situation must be one in which the court considers it fair, just and reasonable the law should impose a duty of care of a given scope on the one party for the benefir of the other’. (Elliott et al 2007) Another important aspect that had been considered by the House of Lords have held in La Banque Financiere de la Cite v Westgate Insurance Co Ltd was that if there had been an omission to speak it would not lead to construing of liability. A further important authority in respect of negligent misstatement is that of Hedley Byrne v. Heller2 wherein it was construed by the courts that there was no negligent misstatement on the basis that the facts portrayed that there had been disclaimer within the remarks that is the use of the term without responsibility which le d to the possibility of a duty of care to be extinguished. There had been a controversial decision of Royal Bank of Scotland plc v Bannerman Johnstone Maclay, wherein the absence of the disclaimer of liability was considered to be pivotal so as to establish a duty of care and holding the auditors liable. The facts of the case were that BJM were auditors of APC Ltd and RBS was the principal lender of APC Ltd and due to such lending RBS had an equity interest in APC. One of the requirement of RBS in their facility letters was the provision of audited financial statements by APC to RBS within six months of the end of financial year. Such copies were provided to RBS so as to assist them for lending decision. Subsequently RBS bought an action against BJM for the losses that were suffered by RBS as a result of reliance on such audit accounts which had inaccuracies. There was an application made by BJM to strike out the claim as there was no duty of care owed to RBS. It was decided by the court as a preliminary issues that what had been pleaded by RBS was sufficient to lead to a duty of care. Thus it was found that even though there was no direct contact between the parties BJM could have disclaimed liability when it came to know that RBS would be seeing the audited accounts for lending decisions. Thus the important reason was the absence of th

Pay day loan companies should be subject to more regulation Assignment

Pay day loan companies should be subject to more regulation - Assignment Example Vega (2014) argues the loans offered range from  £100 to  £1000 and this is offered for a period of few weeks or months. However, these lenders face a lot of criticism. This is because lots of people argue that they lend money irresponsibly and charge very high interest rates to individuals (Bonnette, 2005). This is unlike the traditional lenders who required lots of details so as to lend money to their clients. In light to this argument, this essay shall attempt to evaluate if the pay day lenders should have their businesses regulated or not. As seen in the work of Vega (2014), pay day lenders subject their borrowers to misery. This is from the verity that they ask for very high interest rates to desperate individuals who wish to sort out their financial issues with immediacy. One would argue that these pay day lenders are simply on the move to make huge amounts of profit by frustrating poor individuals who lack better alternatives to their present situations. In fact, the Perry (2011) and Cresswell (2009) refer to the pay day lenders as the worst offenders that the society can breed. However, the pay day lenders defend their mission by arguing that they save situations that cannot get assistance from the traditional lenders (Vega 2014; Jefferson, 2012.). They also argue that their services are better as they prevent borrowers from yearly interest rates that are high and may rise to 400% (Vega, 2014). The most interesting part, though, is that more and more people are caught up with this system with the day. Pay day loan companies should be regulated by the government as they offer extremely high interest rates to their clients. As argued by Cackley (2011) in an event that the pay day companies are regulated, it will be easy for regulation to take place as the government will ask for a clear range of the interest rates payable by the clients. This means that the pay day companies will only deal with persons can