No "Auditor Exception" To The In Pari Delicto Doctrine

In the decision of Hon. Karen Weldin Stewart, et al. v. Wilmington Trust Services, Inc., C.A. No. 9306-VCP (Ct. Ch. Mar. 26, 2015), the Court of Chancery provided a thorough analysis of the in pari delicto doctrine and its various exceptions.  Of note, the Court declined to find a blanket "auditor exception" to the doctrine, despite the fact that several states have adopted such an exception.

As discussed in this case, the in pari delicto doctrine is an affirmative defense by which a party is barred from recovering damages if his losses are substantially caused by activities the law forbade him to engage in.  There are several exceptions to the doctrine under Delaware law, such as the adverse inference exception, the fiduciary duty exception, and the so-called public policy exception.