In Hedley Byrne V. Heller (1964) the court held that provided that it could be established that a special relationship existed between parties it was possible for a person to sue for having suffered a financial loss even though no contractual relationship existed between the parties.
Highlight the factors that should be established in order for a third party to successfully sue an auditor for professional negligence
For a third party to successfully sue an auditor in damages for professional negligence it must be established that:
• The auditor was engaged on the premise that he professed to have certain skills.
• The auditor was at all material times aware that his report would be relied upon i.e. he knew or reasonably ought to have known.
• The third party suffered loss of financial nature