In what circumstances will a shareholder be able to sue their auditor for misrepresentation?
Ontario, Canada
The following excerpt is from Burns v Sharan Sohi et al., 2012 ONSC 2414 (CanLII):
In Hercules, several shareholders sued the corporation’s auditors for negligent misrepresentation in preparing their audit report. In reviewing the rationale for the rule in Foss v. Harbottle, the court concluded that in order to avoid a multiplicity of actions by shareholders and the risk of liability in an indeterminate amount for an indeterminate time to an indeterminate class, a derivative action by shareholders would be preferable.
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