Corporate Law, Business Law, Personal Liability, Third-Party Liabilitiy, Tort Law
When is a director or of�� cer personally liable in tort to a party who is not the corporation he or she serves? In Canada, there is no clear answer. The law is marked by division both within and between appellate courts, resulting in judgments that are hard to reconcile and verge on arbitrary. This is likely attributable to the mistaken belief that there is a tension between personal liability and corporate personality, as well as the disputed relationship between common law and statutory obligations. To address these challenges, most Canadian courts have followed a threshold corporate law analysis, which seeks to categorize the allegations as either corporate or personal. When applied, this approach often results in directors and of�� cers having immunity with respect to torts they committed in pursuit of the corporation’s interests. Such immunity, however, has no basis in law. Canada’s business corporations statutes do not limit the liability of directors and officers, and implicitly contemplate their exposure to tort claims.
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Michael Marin, "Third-Party Liability of Directors and Officers: Reconciling Corporate Personality and Personal Responsibility in Tort" (2019) 42:2 Dal LJ 335.