I. INTRODUCTION

A.        Project Description

Ontario previously considered reform on the issue of professional liability in a report prepared by Professor Roger Wolff on claims made against public accountants in 1994.  That report, Joint and Several Liability and Professional Defendants – Options Discussion Paper[1] (“Options Discussion Paper”), recommended to the Government of Ontario a system of proportionate liability. Given the amendments to the Canada Business Corporations Act (“CBCA”)[2] in 2001(which changed the joint and several liability regime to a modified proportionate liability regime), the liability scheme introduced into the Ontario Securities Act[3], as well as trends in other jurisdictions (all of which are discussed in more detail below), on February 5, 2009, the Board of Governors of the Law Commission of Ontario approved a project to address the appropriate form of liability for professionals advisors under the Ontario Business Corporations Act .

The focus of this project is specifically with respect to proposed changes to the OBCA. It is not about tort reform more broadly. Consideration of issues arising from the broader context may contribute to the LCO’s analysis about liability and the policy considerations that must be measured when thinking about reform  in this context, however.

B.        The Consultation Process
 

On October 28, 2010, the LCO, supported by the Hennick Centre for Business and Law, held a half-day roundtable discussion to review the “joint and several” liability scheme for professionals under the Ontario Business Corporations Act (“OBCA”). Specifically, the LCO sought feedback on whether the current practice of joint and several liability under the OBCA should be amended to bring it in greater alignment with the Ontario Securities Act (“OSA”), federal legislation and trends in other jurisdictions. The Roundtable panellists and participants consisted of a range of professionals who represented the interests of various stakeholders, including corporate lawyers, accountants, litigators (plaintiff-side and defendant-side), retail and institutional investors, and consultants. The Roundtable provided an overview of the amendments to the CBCA and the  OSA and generated discussion on various perspectives. A shorter Consultation Paper had been prepared as background for the Roundtable. The views expressed at the Roundtable have been taken into account in developing this Consultation Paper.

This Consultation Paper has been posted on the LCO website and distributed widely, including to the Roundtable participants. This Paper defines relevant terms and outlines options for reform. Comments on this Consultation Paper are encouraged until May 14, 2010. The LCO will then prepare a draft Final Report with recommendations that will be submitted to the Board of Governors for approval.