Brussels, 21/05/2008 (Agence Europe) - Addressing the European Parliament legal affairs committee on Monday 19 May, European Internal Market Commissioner Charlie McCreevy took stock of progress made by the Commission on company law and intellectual property rights. He announced that the Commission would, before summer, adopt a recommendation to put a cap on auditors' liability.
“In the company law area, I already set out my intention to you to prepare a recommendation on auditors' liability,” McCreevy said. This recommendation, to be brought forward by the summer, will encourage member states to put a cap on auditors' liability, with the precise form of the cap being left to member states themselves to decide. In Belgium and Germany, auditors' liability is already capped, while in the United Kingdom liability is subject to a contractual arrangement between the auditing firm and the company being audited.
While acknowledging that they have responsibility for their actions and any possible negligence on their part, auditors believe that their liability should be capped. Full liability can lead to court proceedings against auditors, who have not detected a problem in the accounts of an audited company, rather than against those responsible for the accounting error. There is also the matter of the heavy concentration in the auditing of major listed companies on four international firms - the “big four”. In initiating a public consultation exercise on auditors' liability, the Commission put forward four possibilities for reform: - setting a financial cap at European level; - setting a cap based on the size of the company audited, determined by its market capitalisation; - setting a cap based on the fee charged by the auditor to the client; - using the principle of proportionate responsibility. The consultation exercise showed that there were wide differences of opinion among stakeholders (see EUROPE 9448).
McCreevy said that, in the course of this year, he would launch a legislative proposal to simplify the information requirements contained in directives 78/855/EEC and 82/891/EEC on national mergers and divisions. This measure would be part of the Commission's efforts to lighten the administrative burden on companies. In the autumn, the Commission will bring forward measures to consolidate the standards and interpretations for use in the EU for listed companies. This will involve regrouping all regulations together into one singe regulation.
Intellectual property rights. McCreevy said that, “just before or just after the summer break”, the Commission would adopt a Green Paper on copyright in the Knowledge Economy. He went on, “The purpose of this Green Paper is to encourage debate on how copyright legislation can continue to serve the objective of the dissemination of knowledge for research, science and education - particularly in the online environment”. A public consultation exercise on this issue will be launched thereafter.
McCreevy also confirmed that, by the summer, he would propose extending the protection for performers and sound recordings from the current 50 to 95 years (see EUROPE 9602). He noted, too, that the Commission was preparing a legislative proposal, to be presented in the coming months, for a further substantial reduction of fees when applying to the Office of Harmonisation for the Internal Market for a Community trade mark (see EUROPE 9618). A public hearing will be held in Brussels on 27 May to discuss private copying levies. (M.B.)