Trends in Canadian Securities Class Actions: 1997-2008, Canada Strikes its Own Course

Fri Jan 30 15:24:00 EST 2009
By Bradley A. Heys, Svetlana Starykh, and Mark L. Berenblut

Securities class actions are a relatively new development in Canada, spurred on by recent legislative changes. In light of the now fertile environment for securities class action litigation in Canada, and coinciding with NERA's new presence in the country, this new study examines for the first time trends in Canadian securities class actions. The study -- by Vice President Bradley Heys, Senior Consultant Svetlana Starykh, and Affiliated Consultant Mark Berenblut -- includes analyses of the impact of the credit crisis, trends in filings, trends in resolutions (verdicts and settlements), and global cross-border shareholder class action settlements, and offers detailed data on pending shareholder class actions.

According to the study, a record nine securities class actions were filed in 2008, an 80% increase over the previous maximum annual filings and a 125% increase over 2007 filings. This increase in filings may reflect recent legislative changes to the provincial Securities Acts. Between 2005 and 2008, four provinces (Ontario, Alberta, Québec, and British Columbia) have introduced civil liability for continuous disclosure and a right of action for investors harmed by misrepresentations or failures to make timely disclosure. These amendments to the provinces' Securities Acts have opened the door to securities class actions.

This study has been published in the August 2009 issue of the Journal of Business Valuation.