Civil Liability And Auditors’ Consents

As you likely know by now, amendments to the Ontario Securities Act providing for civil liability for secondary market disclosure came into force on December 31, 2005. In general terms, these amendments provide statutory civil liability on reporting issuers, directors, officers and others for misrepresentations in continuous disclosure documents. Experts, such as auditors, may be liable if a misrepresentation is contained in their report or a summary or quotation therefrom if the expert has consented in writing to the use of the report. The issuer and other persons who might be liable for a misrepresentation in a continuous disclosure document generally have a defence with respect to the inclusion of or summary or quotation from an expert's report if the issuer obtained the written consent of the expert to the use of the report.