A proposal for new legislation on liability for auditor's in Sweden has recently been presented. I am supposed to, on behalf of my faculty, to comment on the proposal. The proposal notes the difficulties of the big auditor firms working in Sweden to insure themselves, especially after Andersen. It thereafter proposes some liability limitations, the most interesting being that the auditor is liable only as a last resort (if a third party has a claim she must start with the company representatives) and in addition a cap on damages is suggested. (Approx. 11 million Euro.)

I tend to dislike caps intuitively, but I guess there are some sound arguments for it. I would be very grateful for any comment on how caps in general are motivated in other countries and especially if some of you have experiences of caps on damages for auditors in particular.