Edward S. Cheng quoted in Massachusetts Lawyers Weekly on “in pari delicto” doctrine

June 9, 2017

Edward S. Cheng, partner in the firm’s litigation department and co-chair of professional liability practice group, was quoted in the May 25th issue of Massachusetts Lawyers Weekly. The article, entitled “College can’t sue auditor for failing to detect fraud,” discussed Superior Court Judge Kenneth Salinger’s rejection of exception to ‘in pari delicto’ doctrine.

From the article:

Edward S. Cheng, who co-chairs the professional liability practice group at Sherin & Lodgen in Boston, said the ruling makes sense given that a corporation can act only through its employees, and the financial aid director was acting the within the scope of her employment under the three-factor test applied in Massachusetts.

“Was the employee acting within the scope of their responsibility? Did they do it during a time they were working for the company? Was it for the company’s benefit? If the answer is ‘yes,’ ‘yes’ and ‘yes,’ then that person is acting for the company,” Cheng said. “In this case, Merrimack was the one that did this fraud.”

Cheng said he does not see Massachusetts courts recognizing an auditor’s exception in the future, particularly since state courts have already refused to recognize an exception to the in pari delicto doctrine for lawyers.