Supreme Court Of Canada To Hear Landmark Auditor's Liability Case

Today, on June 9, 2016, the Supreme Court of Canada granted former Livent auditor, Deloitte & Touche, leave to appeal from the decision of the Court of Appeal for Ontario, in Livent v. Deliotte & Touche http://www.canlii.org/en/on/onca/doc/2016/2016onca11/2016onca11.html?searchUrlHash=AAAAAQAGbGl2ZW50AAAAAAE&resultIndex=2 that it was liable for more than $80 million in damages to the receiver for theatre company, Livent, due to its failure to detect fraud by Livent's senior management. Two members of Livent's management team, Myron Gottlieb and Garth Drabinsky, were ultimately criminally convicted of fraud and served jail time in connection with the Livent fraud.

It is expected that this case will continue to be watched very closely by auditors and the legal counsel that advise them – as it will set the rules for when an auditor will be held responsible for frauds committed by the very company it has audited. The decisions in this case in both the Superior Court