The decision in the Caparo case (1990) reduced the duty of care of auditors to:

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The Caparo case (Caparo Industries plc v Dickman [1990] UKHL 2) established a more restrictive approach to the duty of care of auditors, limiting it primarily to the shareholders as a group rather than extending it to all potential users of the financial statements. This decision was based on the three-part Caparo test (foreseeability of damage, proximity of relationship, and whether it is fair, just, and reasonable to impose a duty of care), which aimed to limit the scope of who could claim against auditors for negligence.

The Decision in the Caparo Case (1990) Reduced the Duty