Reibl v. Hughes (1980), Supreme Court of Canada
Although the case involved a medical procedure, the principles from Reibl v. Hughes are highly relevant to real estate professionals. The problem is that we don’t have the issue of informed consent reaching the Supreme Court of Canada in a real estate case, so we have to look at one involving “medical malpractice”. The decision explains what true “informed consent” means when a professional advises a client.
1. Professionals Must Disclose Material Risks
In Reibl v. Hughes, the Court held that a professional must disclose all material risks and reasonable alternatives so the client can make a meaningful decision.
For real estate agents, this means explaining matters that could influence the client’s decision, such as:
- known defects or risks affecting a property
- potential structural or environmental concerns
- market risks or pricing issues
- alternatives available to the client (inspection, financing conditions, waiting for market changes)
If the information could reasonably affect the client’s decision, it should be disclosed.
2. A Signature Alone Is Not “Informed Consent”
The Supreme Court emphasized that a signed consent form does not automatically prove informed consent.
For real estate agents, this means that having a client sign paperwork, such as waivers, acknowledgements, or agreements does not replace the duty to explain material risks and options clearly. Clients must understand what they are agreeing to.
3. Liability Can Arise From Non-Disclosure
The Court also clarified that failure to disclose material risks may lead to negligence liability if the client suffers loss as a result.
In real estate practice, a client might argue that:
- they were not warned about a significant risk, or
- they were not told about a reasonable alternative course of action.
If proper disclosure had been made, the client may claim they would have made a different decision.
4. The “Reasonable Person” Test
The Court adopted an objective test: would a reasonable person in the client’s position have made a different decision if properly informed?
This means courts may consider the client’s real circumstances—financial pressures, family needs, investment goals, or risk tolerance—when assessing whether disclosure was adequate.
Considerations for Real Estate Professionals
The lesson from Reibl v. Hughes is simple but powerful:
Professional advice requires meaningful disclosure.
Clients must receive enough information about risks, consequences, and alternatives to make a genuine decision.
A signed form alone is not enough.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com