Civil liability

Primary liability

What civil law causes of action are available against businesses for human rights abuses?

For human rights abuses stemming from conduct within Canada, businesses may be liable under human rights legislation. Each jurisdiction in Canada has its own human rights legislation. The legislative framework in each jurisdiction is similar. To establish liability, a complainant must prove that he or she has been discriminated against based on a prohibited ground. Prohibited grounds generally include race, religion, age, sex, sexual orientation, gender, gender identity or expression, family status, disability, criminal convictions, ethnic origin and political association.

Once a complainant establishes prima facie discrimination, a business can avoid liability under human rights legislation if it can establish that the action or standard in question:

  • is for a purpose or goal rationally connected to the function being performed;
  • was established in good faith, in the belief that it is necessary for the fulfilment of the purpose or goal; and
  • is reasonably necessary to accomplish its purpose or goal, because the respondents cannot accommodate persons with the characteristics of the complainant without incurring undue hardship, whether that hardship takes the form of impossibility, serious risk or excessive cost.

 

Remedies under human rights legislation are broad and most adjudicative bodies can award any remedy that will prevent and correct the discriminatory behaviour.

There have only been a handful of civil actions commenced in Canada against Canadian businesses stemming from alleged human rights violations committed outside of Canada. None of the cases have been decided on the merits yet. The causes of action in the cases currently before Canadian courts are based in tort law, including negligence, either alone or in combination with other torts, such as battery, unlawful confinement, conspiracy or negligent infliction of mental distress.

Director and officer liability

In what circumstances and to what extent are directors and officers of businesses subject to civil liability for involvement or complicity in human rights abuses?

In general, under Canadian law, directors and officers are not personally liable for what they do on behalf of a corporation. As such, they would typically not be held personally liable for the human rights violations or the tortious conduct, including negligence, of the corporation. Directors and officers may be liable, however, if their conduct is wrongful in itself or exhibits a separate interest from that of the corporation so as to make the act complained of their own. In other words, the director or officer must have engaged in misconduct in his or her personal capacity. The plaintiff must prove that the specific conduct of the director or officer was either tortious or discriminatory, separate and apart from the interests of the corporation.

The defences available to a director or officer are the same as those available to the corporation. A director or officer may take the position that there is no prima facie discrimination. However, where prima facie discrimination has been established, with regard to defences available to an officer or director, a plaintiff must demonstrate that a parent corporation and its subsidiary are not truly operating as separate corporations.

The remedies available as against an officer or director would be the same broad remedies that are available against a corporation.

Piercing the corporate veil

When can the courts disregard the separate legal personalities of corporate entities within a group in relation to human rights issues so as to hold a parent company liable for the acts or omissions of a subsidiary?

Canadian legislation prevents the piercing of the corporate veil except for in limited circumstances. Generally, to succeed in piercing the corporate veil, a plaintiff must demonstrate that a parent corporation and its subsidiary are not truly operating as separate corporations. Additionally, in very limited circumstances, courts will pierce the corporate veil when a refusal to do so would yield a result that is flagrantly opposed to justice.

Secondary liability

In what circumstances and to what extent can businesses be held liable for human rights abuses committed by third parties?

In Canada, a business can be held liable for the acts of its employees, agents or any person for whom it is responsible under limited circumstances. Corporations are generally vicariously liable for acts of their employees committed in the course of their employment.

The issue of liability for human rights abuses committed by third parties abroad remains unclear in Canada. A number of cases currently before Canadian courts will likely clarify whether Canadian businesses can be held liable for the acts of third parties connected to their business ventures.

Shareholder liability

In what circumstances can shareholders be held liable for involvement or complicity inhuman rights abuses?

The issue of shareholder liability for a business’s human rights abuses has not been considered by Canadian courts.

Law stated date

Correct as of

Give the date on which the information above is accurate.

January 2020.