Cardozo indeterminacy

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Cardozo indeterminacy
/kɑːdəʊzəʊ ɪndɪˈtəːmɪnəsi (n.)

Liability, if awarded — and therefore, generally not awarded —that would be in “an indeterminate amount for an indeterminate time to an indeterminate class” of claimants. Named for US Supreme Court Justice Benjamin N. ~, progenitor of that phrase in Ultramares v Touche.

The great American jurist Benjamin N. Cardozo held that a creditor’s claim in negligence against a debtor’s incontestably negligent auditors failed because the auditors did not owe the company’s creditors a duty of care, there being no sufficiently proximate relationship between them. Articulating a now somewhat outdated shareholder capitalism, Cardozo J held the auditors to owe only the shareholders a duty of care.

Said Cardozo J, in an immortal passage that gave rise to the metajuridical concept of “Cardozo indeterminacy”:

“If liability for negligence exists, a thoughtless slip or blunder, the failure to detect a theft or forgery beneath the cover of deceptive entries, may expose accountants to a liability in an indeterminate amount for an indeterminate time to an indeterminate class. The hazards of a business conducted on these terms are so extreme as to enkindle doubt whether a flaw may not exist in the implication of a duty that exposes to these consequences.”

References

• Dilbert definition