IAI Actuarial Core Principles · Business Management · Professional negligence
Under the law of negligence applied to professional advice in India, what is the general aim of damages awarded against an actuary found liable for causing financial loss to a client?
Damages in negligence aim to put the client back in the position it would have been in had the negligence not occurred. They are compensatory for loss actually caused, not punitive, and are not set by a fixed statutory sum or the actuary's earnings.
- ATo put the client in the position it would have been in had the negligence not occurredCorrect
- BTo punish the actuary through an amount unrelated to loss
- CTo give the client the actuary's total professional earnings
- DTo place the client in the position it would have reached if the advice had been perfect and profitable
- To award a fixed sum set by the Actuaries Act, 2006
Explanation
In tort, compensatory damages restore the claimant to the position it would have occupied had the wrong not been committed. This differs from contract, where the aim is the position had the promise been performed. Punishment, earnings-based awards and fixed statutory sums are not the measure.
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