When borrowers go insolvent, it is not uncommon for lenders to
advance claims against the auditors of the borrower. The December
10, 2015, decision of Justice Perell of the Ontario Superior Court
of Justice in
CIBC v. Deloitte ("CIBC")
is the latest word on who, other than their clients, auditors may
owe a duty of care to.
A duty of care arises from the relationship between the parties,
and is a necessary element to a successful claim in negligence.
Historically, an auditor's duty of care to individuals or
entities beyond its audit clients (in the context of public
companies) has been limited by the Courts due to policy concerns
surrounding indeterminate liability: namely, that an auditor should
not owe a duty of care to every individual or entity that might
review and rely upon the financial statements and auditor's
report for a public company.
