Liability of Technical Professionals in the Mining Industry - The Lawyers' Perspective

Mark Westfield, writing in The Australian on 16 May 1994 stated: The role of the independent expert is crucial to Australia's investment system. When it falls down, there can be very dramatic consequences. The scope of these consequences was dramatically illustrated in the decision of Rogers J. at first instance in Cambridge Credit Corporation v. Hutcheson (1983) 8 ACLR 123 when the auditors of the failed company were found liable for breach of contract and faced a damages award of $145 million, well in excess of their insurance cover. No comfort should be sought in the fact that this decision was overturned on appeal, for the result of the appeal rested on whether there had been a causal connection between the breach of contract which had occurred and the loss suffered, rather than on the fundamental principle of auditors' liability. Thus: Those who prepare experts' reports in company cases carry a heavy moral responsibility, whatever their legal duties may be... Unless high standards are observed by those who prepare these reports, there is a danger that systems established for the protection of the investing public will, in fact, operate to their detriment through reliance placed on those reports and on the reputations of those who furnish them. In lending his name, the expert will often, as in this case, be lending a name to conjure With.