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ARTICLE · 17 SEPTEMBER 2018

Auditors' Exposure To Liability Continues To Shrink

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On Sept. 5, 2018, the Ontario Court of Appeal (the "Court") released its decision in Lavender v. Miller Bernstein LLP, clarifying the scope of an auditor's duties to non-clients.

CanadaLitigation, Mediation & Arbitration
Max Muñoz
Max Muñoz
Andrew Locatelli
Andrew Locatelli
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On Sept. 5, 2018, the Ontario Court of Appeal (the "Court") released its decision in Lavender v. Miller Bernstein LLP, clarifying the scope of an auditor's duties to non-clients. Applying the principles set out by the Supreme Court in Deloitte & Touche v. Livent Inc (Receiver of), the Court overturned the decision of the Ontario Superior Court and found that the defendant auditor did not owe a duty of care to a class of individuals that was not the audience for the report reviewed by the auditors, and who did not personally rely upon the relevant misstatements. In making its decision, the Court or Appeal emphasized that establishing a duty of care in cases of pure economic loss is a significant threshold to pass.

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