7.2 Classification of prospectus liability claim

In all legal systems, which are subject of this research, prospectus liability claims against the issuing company, its directors, the lead manager and/or other sponsoring banks, the accountants and auditors respectively classify as claims in tort. Some German scholars classify the claims under German law that are based on the general private law (improper) prospectus liability in the broad sense as a reliance liability claim (Vertrauenshaftung), i.e. a special form of liability in between contract and tort.1 However, in this research, I assumed that the typical investor claiming damages for losses incurred as a result of the false or misleading prospectus has no contractual relationship with the defendant. Furthermore, the duty to provide correct information is owed towards all (unknown) financial market participants. Therefore, prospectus liability claims classify as claims in tort. Furthermore, Rule VI-2:207 on liability for losses incurred as a result of reliance on incorrect advice or information2 as proposed in the Draft Common Frame of References ("DCFR"), an academie text to provide principles, definitions and model rules of European private law, is part of Book VI on non-contractual liability arising out of damage caused to another.

In Dutch and French law, investors can base their claim on the general tort liability provision laid down in the respective civil codes.3 Dutch, English and German law provide for a special regulation with respect to damage claims based on a false or misleading prospectus. In Dutch law, only investors qualifying as consumers can base their damage claim on the special regulation. In English law, investors can only claim for damages on the basis of section 90 FSMA 2000, if the defendant had a legal obligation to publish a prospectus. If the defendant had no such obligation, e.g. because one of the exceptions or exemptions were applicable, the investor may be able to claim on the basis of a common law duty of care. In German law, the application of the prospectus liability regime laid down in sections 44 and 45 of the Stock Exchange Act is restricted to securities admitted to a regulated market situated in Germany or securities admitted to a non-German regulated market were purchased on the basis of a transaction concluded in Germany or on the basis of an investment service provided wholly or partially in Germany. Otherwise, investors have to claim on the basis of the general private law prospectus liability.