The Tortious Liability of Directors and Officers to Third Parties in Common Law Canada

Abstract

The law regarding the tortious liability of corporate directors and officers to third parties remains conflicted. One line of authority, adopted in Alberta, provides that liability is rare in the context of torts committed in a corporate capacity, and it largely closes the door on liability for ordinary negligence. A competing line of authority, however, contends that tortious liability is common. Signalling a different approach, Justice Slatter of the Alberta Court of Appeal provides a policy-based stance that accounts for the importance of both tort law and corporate law principles to the question of liability for ordinary negligence. Beyond offering balance, Justice Slatter’s approach has the benefit of aligning with pronouncements from the Supreme Court of Canada regarding directors’ and officers’ liability in negligence to third parties. This article outlines the current authorities in the area, concluding that Justice Slatter’s judgment provides a clear and principled way forward.