The Quebec Superior Court's recent ruling in Ludmer et al v Attorney General of Canada has clarified that the Canada Revenue Agency (CRA) can be forced to pay damages in negligence to taxpayers who have been measurably harmed by abuse of its tax audit powers.

It is the first case in which taxpayers have successfully sued the CRA for a negligence claim – in this case, a total of CAD4.8 million to the various Ludmer taxpayers who suffered protracted and abusive tax audits.