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The Ontario Court of Appeal has ruled that it is not “plain and obvious” that regulatory investigators owe no duty of care to suspects under investigation. The same logic should apply to environmental investigators: shouldn’t they be personally liable to their suspects, if they misuse their powers?

In McCreight v. Canada (Attorney General), the Canada Revenue Agency (CRA) suspected a chartered accountant and other senior tax advisors of fraud and conspiracy to help their clients obtain research and development tax credits. The CRA investigators obtained three search warrants to search the homes and offices of the accused, and seized numerous documents and computers. When the court rejected a CRA request for an extension of time to review the seized documents, the CRA laid charges against all the accused. A judge later ruled that the charges had been laid “primarily to retain possession of the seized documents”.

Seven years later, the charges against the individual tax advisors were dismissed by the court, on the ground that they were not supported by any evidence. The charges against the corporate taxpayers were later dismissed on the basis of unreasonable delay contrary to the Charter. The individuals then began a lawsuit against, among others, the CRA investigator who obtained the search warrants and swore the Information against them.

The federal government moved to strike out the lawsuit, arguing that the investigator owed no duty of care to suspects under investigation. The Court of Appeal disagreed.

Negligence is not a recognized cause of action against prosecutors. However, it is possible that it is a valid cause of action against investigators. The Supreme Court has already ruled that, in certain circumstances, police officers may owe a duty of care to their suspects. It is not plain and obvious that the same rule cannot apply to CRA investigators. Therefore, the court allowed the lawsuit against the investigators to proceed to trial.

By the same logic, environmental investigators may owe a duty of care to suspects that they investigate. The penalties imposed under the Environment Protection Act are often equally or more severe than those imposed under the Income Tax Act, and the consequences of unwarranted charges can be at least as severe.

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