By: Jassmine Girgis
PDF Version: Director Liability and the Workers’ Compensation Scheme: The Divergence Between Policy Goals and Outcomes
Case Commented On: Hall v Stewart, 2019 ABCA 98
The workers’ compensation scheme and its effect on directors’ personal liability for corporate torts is an area of law that pursues the right policy goals but fails to achieve those goals in its implementation.
This post is about directors’ personal liability, the interplay between the Workers’ Compensation Act, RSA 2000, c W-15 (Act) and common law, and the policy issues that arise from this scheme. When the workers’ compensation scheme is superimposed on the common law system, it immunizes the corporation for corporate torts while leaving directors open to suit if they do not purchase special coverage. Their liability is then determined by common law principles.
In Hall v Stewart, the director, Stewart, did not purchase additional insurance, leading the Court of Appeal to conclude he could be held personally liable for the tort of the corporation under the two-step Anns/Kamloops test (from Kamloops (City of) v Nielsen, 1984 CanLII 21 (SCC), [1984] 2 SCR 2). This post will discuss two issues arising from this decision; first, the policy issue this scheme engenders, which should have been addressed under the second step of the Anns/Kamloops test, and second, the influence of Nielsen Estate v Epton, 2006 ABCA 382 (CanLII), affm’g 2006 ABQB 21 (CanLII), on this decision, which the Court of Appeal did not apply.