Corporate Fraud | Commercial Fraud
Corporate and commercial fraud causes serious financial harm to businesses, organizations, and individuals. Whether you have been defrauded and need to recover your losses, or your organization is facing a fraud allegation it needs to defend, you need fraud lawyers who understand both the legal framework and the commercial realities at stake. We act on corporate fraud, commercial fraud, and financial fraud litigation across Ontario and British Columbia, including in Ottawa and Toronto.
Speak With a Fraud LawyerWhat Is Corporate and Commercial Fraud?
Corporate and commercial fraud is distinct from criminal fraud. While criminal fraud is prosecuted by the state and can result in imprisonment, a fraud claim is pursued through the courts by the party who suffered the loss and results in financial remedies rather than criminal penalties. A fraud lawyer acting in commercial litigation focuses on recovering what was lost, stopping ongoing fraudulent conduct, and in appropriate cases obtaining punitive damages that reflect the deliberate nature of the wrong.
To establish a fraud claim, a plaintiff must prove that the defendant made a false representation of fact, that the defendant knew the representation was false or was reckless as to its truth, that the representation was made with the intention that the plaintiff rely on it, that the plaintiff did rely on it, and that the plaintiff suffered a loss as a result. This is the tort of fraudulent misrepresentation, and it is the foundation of most commercial fraud litigation claims.
Corporate fraud and commercial fraud encompass a wide range of conduct: misrepresentations in business transactions, misappropriation of corporate assets, fraudulent financial reporting, Ponzi schemes, mortgage fraud, and fraudulent inducement of contracts. The common thread is deliberate dishonesty that causes financial harm. A corporate fraud lawyer can assess whether the facts support a fraud claim and what remedies are available.
Types of Fraud Litigation We Handle
Corporate Fraud
Corporate fraud involves dishonest conduct by individuals within or connected to a corporation that causes financial harm to the corporation, its shareholders, or third parties. It includes misappropriation of corporate assets by directors or officers, fraudulent financial reporting, diversion of corporate opportunities for personal gain, and fraudulent transactions between the corporation and related parties. Corporate fraud litigation frequently overlaps with breach of fiduciary duty claims, and both causes of action are often pursued together. See our breach of fiduciary duty page for more on the fiduciary duty analysis.
Commercial Fraud
Commercial fraud arises in the context of business transactions where one party has induced another to enter a deal through false representations. Commercial fraud claims are common in acquisition transactions, where a seller has misrepresented the financial condition, assets, or liabilities of a business being sold. They also arise in supply agreements, joint ventures, real estate transactions, and any commercial context where one party has made deliberate misrepresentations to gain a financial advantage.
Commercial Fraud Claims and Misrepresentation
Commercial fraud claims often proceed alongside claims for negligent misrepresentation or breach of contract arising from the same facts. The advantage of framing a claim as fraudulent rather than merely negligent is the broader range of remedies available, including rescission of the transaction and punitive damages, and the ability to pursue individuals personally even where the transaction was nominally between corporations. A corporate misrepresentation lawyer can advise on which framing gives the strongest position on the specific facts.
Financial Fraud
Financial fraud covers dishonest conduct in financial transactions, investment schemes, lending arrangements, and banking relationships. Bank fraud, investment fraud, and Ponzi schemes are all forms of financial fraud that can give rise to civil litigation claims in addition to any criminal proceedings. A financial fraud lawyer can advise on the civil remedies available to victims of financial fraud, including asset tracing, injunctions to freeze fraudulently obtained assets, and claims against financial institutions where they failed to detect or prevent fraud.
Fraud Investigation
Before a fraud claim can be advanced effectively, the scope of the fraud needs to be established. Fraud investigation lawyers work with forensic accountants and other experts to trace the movement of assets, identify the parties involved, and quantify the loss. This investigative work is the foundation of an effective fraud litigation strategy and it also informs decisions about what urgent steps, including injunctions and asset-freezing orders, are warranted at the outset.
Fraud Defence
Not every allegation of fraud is well-founded. Corporate fraud defence requires lawyers who understand both the elements of the cause of action and the evidentiary standards that apply. An allegation of fraud is serious and carries reputational consequences beyond the legal proceedings. We act for organizations and individuals defending fraud allegations and provide clear-eyed assessments of the strength of the claim and the available defences, including that the representation was not false, that it was not made with fraudulent intent, or that the plaintiff did not actually rely on it.
Fraud cases require urgent action. Evidence can disappear and assets can be moved quickly. Call us as soon as you suspect fraudulent conduct has occurred.
1-800-771-7882 Talk to a Corporate Fraud LawyerUrgent Steps in Fraud Litigation
Fraud cases move differently from other commercial disputes. The deliberate nature of the conduct means that evidence may be concealed or destroyed and assets may be moved or dissipated if the other party becomes aware that a claim is coming. Acting quickly and strategically at the outset of a fraud matter is essential.
Mareva Injunctions and Asset Freezing
A Mareva injunction freezes the defendant's assets, preventing them from being moved, transferred, or dissipated pending the resolution of the fraud claim. In fraud cases, where there is strong reason to believe the defendant will deal with assets to frustrate recovery, a Mareva order obtained without notice to the defendant can be the most important step taken in the entire proceeding. Obtaining one requires demonstrating a strong arguable case on the merits and a real risk of asset dissipation, along with full and frank disclosure of all material facts to the court.
Norwich Orders and Document Preservation
A Norwich order compels a third party, such as a bank or financial institution, to disclose information that will help identify the perpetrators of a fraud or trace the movement of funds. These orders are an important tool in fraud recovery cases where the full scope of the fraud and the identity of all responsible parties is not yet known. They can be obtained without notice to the defendant where giving notice would risk destruction of the relevant records.
Anton Piller Orders
An Anton Piller order, also called a civil search order, authorizes the plaintiff to enter the defendant's premises and search for and preserve evidence. This extraordinary remedy is available in fraud cases where there is compelling evidence that the defendant possesses relevant materials that would be destroyed or concealed if notice of the proceedings were given. The threshold for obtaining an Anton Piller order is high, but in serious fraud cases where evidence preservation is critical it can be an essential step.
Tracing and Asset Recovery
Fraud recovery requires identifying where fraudulently obtained assets have gone. Asset tracing in fraud litigation uses forensic accounting techniques to follow the movement of funds through multiple accounts and transactions. Once assets are traced, proprietary claims can be advanced against them wherever they end up, including in the hands of third parties who received them without giving value. We work with forensic accounting experts to build the tracing analysis that underpins an effective fraud recovery claim.
Remedies in Fraud Litigation
Damages Including Punitive Damages
A proven fraud claim entitles the plaintiff to compensation for all losses that flowed directly from the fraud, assessed on a more generous basis than contract damages. Where the fraud was particularly egregious, courts in Ontario and BC have awarded significant punitive damages over and above compensation for actual loss. The deliberate and dishonest nature of fraud makes it one of the categories of civil wrong most likely to attract punitive consequences.
Rescission
Where a business transaction was induced by fraudulent misrepresentation, the defrauded party may be entitled to rescind the transaction entirely and be restored to their original position. Rescission is available alongside a damages claim in many fraud cases and can be particularly important where the transaction itself is what caused the loss rather than events that followed from it.
Constructive Trust
Where a defendant has obtained property through corporate or commercial fraud, a court may impose a constructive trust over that property in favour of the plaintiff. This gives the plaintiff a proprietary interest in the asset itself rather than simply a personal claim against the fraudster, which is particularly valuable where the defendant may be insolvent or where the fraudulently obtained assets have increased in value.
Personal Liability of Individuals
One of the most important features of corporate fraud litigation is that individuals can be held personally liable for their fraudulent conduct even where the transaction was nominally between corporations. The deliberate dishonesty involved in corporate fraud removes the protection that the corporate structure would otherwise provide. Officers and directors who personally participate in corporate fraud can be pursued individually for the full extent of the loss caused.
Fraud Lawyers in Ottawa, Toronto, and Across Ontario and BC
Fraud Lawyers Ottawa
Ottawa is a significant commercial centre and the seat of the federal government, and commercial fraud in the Ottawa region covers a wide range of contexts: government contracting fraud, commercial misrepresentation in business transactions, corporate fraud within Ottawa-based organizations, and financial fraud affecting Ottawa-area businesses and individuals. Fraud litigation in Ottawa proceeds before the Ontario Superior Court of Justice in Ottawa, where mandatory mediation applies to most civil proceedings. Our lawyers act on fraud matters for Ottawa-area clients and can advise on the most effective approach for disputes arising in Eastern Ontario.
Fraud Lawyers Toronto
Toronto's concentration of financial institutions, public companies, and major commercial enterprises makes it the centre of the most significant fraud litigation in Ontario. Corporate fraud claims, commercial fraud litigation, and financial fraud recovery cases involving Toronto-based parties proceed before the Superior Court of Justice in Toronto, often on the Commercial List where the complexity of the matter warrants it. We act for Toronto-area clients on fraud matters at every stage and can move quickly when urgent steps are required.
British Columbia
In BC, fraud litigation proceeds in the BC Supreme Court. The substantive law of fraud is the same as in Ontario, and the urgent remedies available, including Mareva orders and Norwich orders, are available in BC courts on the same basis. We practice in both provinces and advise on the procedural considerations and tactical differences between the Ontario and BC court systems.
Fraud Litigation: Frequently Asked Questions
What is the difference between corporate fraud and criminal fraud?
Criminal fraud is prosecuted by the state and can result in imprisonment and criminal penalties. A fraud claim is pursued by the party who suffered the loss through a lawsuit seeking financial compensation. The two processes are separate: a person can be both criminally charged and civilly sued for the same fraudulent conduct. The standard of proof differs: criminal fraud must be proved beyond a reasonable doubt, while a fraud claim is proved on a balance of probabilities. Fraud proceedings can proceed alongside or independently of criminal proceedings.
Can I sue someone personally for corporate fraud?
Yes. One of the most significant features of corporate fraud litigation is that individuals who personally participate in fraudulent conduct can be held personally liable, even where the fraud was committed nominally through a corporation. The deliberate dishonesty involved in corporate fraud removes the protection that the corporate structure would otherwise provide. Directors and officers who personally make or authorize fraudulent representations can be pursued individually for the full amount of the loss caused.
What is a Mareva injunction and when is it available in fraud cases?
A Mareva injunction is an asset-freezing order that prevents a defendant from moving, dissipating, or transferring their assets pending the resolution of the fraud claim. It is available in Ontario and BC where the applicant can show a strong arguable case on the merits and a real risk that the defendant will deal with assets in a way that would frustrate recovery of any judgment. In fraud cases, the deliberate nature of the conduct often supports the inference that the defendant may attempt to hide assets, which makes Mareva relief more readily available than in ordinary commercial disputes.
What is a fraud investigation lawyer and what do they do?
A fraud investigation lawyer works with the client and forensic experts to establish the full scope of a corporate or commercial fraud before or alongside the commencement of litigation. This involves tracing the movement of funds, identifying all parties involved, quantifying the loss, and gathering the evidence needed to support the fraud claim and any urgent steps required at the outset. The investigation phase of fraud litigation is critical: the strength of the evidentiary foundation built at the start of the matter shapes every subsequent step in the proceeding.
How long do I have to bring a fraud claim?
In Ontario and BC, the basic limitation period is two years from the date the fraud was discovered or ought to have been discovered. Because fraud is often concealed, the discovery analysis in fraud cases can be complex and the limitation period may run from a later date than in ordinary commercial claims. Where the fraud was deliberately hidden, courts have been willing to find that the limitation period did not begin to run until the plaintiff had sufficient information to know that a fraud had occurred. Acting promptly once fraud is suspected remains important both for the limitation period and for preserving evidence and assets.
My business partner has been committing fraud against our company. What should I do first?
Secure the financial records and do not confront the partner directly before getting legal advice. Confronting the partner before legal steps are in place risks giving them the opportunity to move assets, destroy evidence, or take other steps that will make recovery more difficult. The first priority is to understand the scope of the fraud, identify what assets are available, and assess whether urgent court orders including a Mareva injunction or the appointment of a receiver are warranted. Call us as soon as the situation arises.
We have been accused of fraud. What are the available defences?
The elements of a fraud claim must each be proven by the plaintiff. Available defences include that no false representation was made, that any representation that was made was honestly believed to be true, that the plaintiff did not actually rely on the representation in making their decision, or that the plaintiff suffered no loss caused by the representation. Fraud allegations are serious and carry reputational consequences beyond the legal proceedings. We advise defendants on the strength of the claim against them and build the most effective defence available on the facts.
Do you act as fraud lawyers in Ottawa and Toronto?
Yes. We act on fraud litigation matters for clients in Ottawa, Toronto, and across Ontario and British Columbia. Whether your matter involves corporate fraud, commercial fraud, financial fraud, or fraud defence, we can advise on the most effective approach and represent you at every stage of the proceeding, including on urgent applications where time is critical.
Speak With a Fraud Lawyer
If your situation is urgent, call us directly at 1-800-771-7882. You can also use the form below and we will follow up promptly.