ABSTRACT

This chapter considers this issue: Carol, a CA, mistakenly certifies that impostor Eve is Alice. Carol expects the certificate to be circulated, just as the defendants in Rasnoimport expected the bill of lading to be negotiated. Eve disappears with the purchase price and Bob, having relied on Carol's certification, has lost the value of 90 bales of rubber. Professor Reed observed that there 'is no physical world activity which corresponds to that of a CA, and thus the obligations of CAs and the extent of their liability under existing law are difficult to determine'. The liability of CAs is limited, however, either to due diligence, or by reference to legislative requirements, or statements in the certificate. The principle adopted in Singapore is that CAs can issue a certification practice statement, in which case their liability is defined by it. Utah and Singapore, but not the EU and the United Kingdom, also provide for subscriber liability.