Duty of care

How BC law treats it

A negligence claim has four parts: a duty of care, breach of the standard of care, damage, and damage caused by the breach that is not too remote. Many duties are already recognized, such as a driver to other road users or a professional to a client. For new situations, Canadian courts apply the test in Cooper v Hobart, 2001 SCC 79: was the harm reasonably foreseeable, was the relationship close enough, and are there policy reasons to deny a duty. Mustapha v Culligan of Canada Ltd, 2008 SCC 27 confirms that the damage must also be a reasonably foreseeable kind. For pure economic loss, the courts are more cautious. In Deloitte & Touche v Livent Inc (Receiver of), 2017 SCC 63, the Supreme Court held that a professional who undertakes a service owes a duty only for losses within the scope of that undertaking and the client's reasonable reliance. This is the main framework for claims against accountants, engineers, advisers and other professionals for negligent misrepresentation or negligent service. Occupiers of premises, including commercial landlords and tenants in control of space, owe visitors a statutory duty to take reasonable care that they are reasonably safe under the Occupiers Liability Act, RSBC 1996, c 337. Under the Negligence Act, RSBC 1996, c 333, liability is apportioned by degree of fault. Most negligence claims must be started within two years of discovery under the Limitation Act, SBC 2012, c 13.

What it means for your business

Every business owes a duty of care to customers, visitors and often to people who rely on its advice or work product. Professionals and advisers face claims for economic loss when clients rely on negligent reports or statements. Commercial occupiers carry premises liability. Understanding where a duty arises helps a business set contract limits, buy the right insurance, and assess whether it has a claim against an adviser who caused it a loss. Example: An engineering firm prepares a structural report for a Surrey developer, which relies on it to proceed with construction. If the report was negligently prepared and the developer suffers losses within the scope of what the firm undertook, the firm may be liable under the Livent framework.

Risks and common mistakes

Assuming a contract with a limitation of liability clause eliminates all exposure in negligence to non-parties. Treating every foreseeable economic loss as recoverable without considering the scope of the defendant's undertaking. Assuming a claim framed in contract has a longer limitation period; in BC most contract and negligence claims share the two year basic limitation period. Ignoring contributory fault, which the Negligence Act uses to reduce the plaintiff's recovery. Assuming a commercial tenant has no occupier's liability for space it controls.