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3 Tort Law - Professional Liability.docx

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Wilfrid Laurier University
Shelley Mc Gill

Professional Liability “Inaccurate Expert Advice” and other unprofessional behaviour: When is there Liability? Professionals  Often the one who gives the advice  not necessarily the one doing the act  ie, the carpenter and the architecture  Offering some kind of opinion  Experts in the field o When it first started, it was doctors, lawyers o Grew over time as specialities grew o After, we looked at things like engineers, accountants  Those who have a separate licensing body  there is some kind of criteria to enter the profession  Almost everyone who sells their opinion and has a license to do it o But then there was a massive recession in the 80’s  laid off the middle management layer  ie. Human resources, manager of safety, operations etc.  They were not considered to be professionals  They became self-employed consultants  Consulting o Perceived to have some expertise whether they have a license or not  have some experience o Independent expert that you can hire on a project by project basis  Professional organization – (Law Society of Upper Canada, Chartered Accountants, Professional Engineers Ontario) o Control designation o Education, discipline o Lobby govt o Public relations o But you cannot sue them for being wrong  Starts with it but not the only criteria  Role of the code of conduct How are professionals sued? 1. Contract – breach of…  Clients will sue you based on breach of contract  Ie. You filed their taxes wrong  they have to pay the additional tax and penalty  The only ones who can sue you are the people in the contract  Not a tort 2. Fiduciary duty – breach of…  Not only clients, but also people “looking after”  Will allow not only the clients but the people you might be looking after or people you might have a responsibility to look after (do not have to pay you) may also sue you  Often goes hand in hand with negligence 3. Tort – negligent misrepresentation  Potentially anyone  does not have to be in a contract  Anyone you owe a duty of care to  any likely or foreseeable victims  3 different causes of action available:  Particular facts and the elements of cause of action, limitation periods and type of damage will determine will determine which is best 2. Fiduciary Duty (Breach of)  My responsibility to you goes further than to do just a confidant job, it’s about loyalty and doing what’s best for you  Most closely resembles an ethical standard of behaviour  In a fiduciary relationship, we have the fiduciary and the beneficiary o Fiduciary: Must keep all the secrets and do all the things right  Ie. Doctor, lawyer, priest/ religious leader  Expect them to give the best advice and look after you o Beneficiary: you don’t have to look after the other party  cared for person  Ie. Patient, client, religious follower  Going to listen to them and suspend your own rational decision-making process Test for imposing a Fiduciary Duty: 1. The fiduciary has scope for the exercise of some discretion or power over you  Ie. Doctors, lawyers, ministers, priests 2. The fiduciary can exercise power so as to affect the beneficiary’s legal or practical interests  Can affect our practical or legal rights 3. Beneficiary is vulnerable to, or at the mercy of the fiduciary a. Case 4.1 Hunt c. TD Securities  The couple said that they were in a fiduciary relationship and do not authorize a particular stock transaction  A sale took place and they lost a lot of money  Argument: they sold it without their permission and this was a non-discretionary account - Once imposed (in the relationship), the duty requ
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