Privity of Contract and Third Party Rights - Report 2008

C. Conclusions and Recommendations

[90] As previously mentioned, the mandate of the Working Group was to prepare a report examining the issues and options set out in the 2007 study paper, and containing recommendations for consideration at the 2008 annual meeting.[91]

[91] The Working Group report lays out a series of issues in regards to the doctrine of privity of contract: (1) Does the privity rule create enough problems in the Canadian context that it needs to be reconsidered at the present time? (2) Would a reform be better achieved through judicial developments of third party rights or legislative intervention if the need arises? (3) What option would be best suited if a legislative intervention is deemed a better alternative? Specific legislative intervention in particular circumstances? A general provision? Or a detailed legislative scheme?

[92] In regards to first issue, a thorough analysis of the legislation (statutory exceptions) and case law (common law exceptions, especially the principled exception, and other means to work around the privity rule) leads the Working Group to conclude that privity in its current form does not represent an urgent matter or, at any rate, a legislative priority at present.[92] Privity does not, at this time, create enough difficulties to justify reform to implement stand alone legislation. Therefore, the Working Group believes that a better course of action is for legislatures to stand back and let the common law take its course, at least for now, given the potential for further clarification and expansion of third party rights by the courts.

[93] Furthermore, the case for legislative intervention should outweigh by some measure the case against. In other words, one should be persuaded that there is a problem which needs to be dealt with, and if there is, that legislation is a valid option before recommending the allocation of legislative resources. The Working Group is of the opinion that the sensible conclusion here is that this criterion has not been met, and the first issue should consequently be answered in the negative.

[94] The report does not provide definitive answers to the second and third issues set forth above, since the Working Group view is that there is no problem which calls for reform in the Canadian context.[93] However, the report outlines and briefly discusses those issues and the available options, as well as some secondary issues ensuing from the development of third party rights in order to allow provincial delegates to form their own assessments, and perhaps provide guidance for legislatures and courts in the future.

[95] In short, the Working Group recommends that the ULCC should not commit to reform the doctrine of privity of contract at the moment because it has not been found that there is currently a problem serious enough to require legislative intervention. Therefore, the Working Group considers that it is not appropriate at this point to make specific legislative recommendations for consideration at the 2008 ULCC meeting.[94]

Next Annual Meeting

2020 Annual Meeting

Place to be Announced

August 9 – 13, 2020