Canadian Securities Class Action Steady in 2013, According to NERA Economic Consulting Report

19 February 2014

Toronto -- Ten new securities class actions were filed in Canada in 2013, the same number as in 2012, and slightly below the average of 11.6 cases per year since 2008, according to NERA Economic Consulting's report released today, Trends in Canadian Securities Class Actions: 2013 Update.

As in 2012, all of the 2013 filings were shareholder class actions, confirming the trend away from previous years' filings of non-shareholder securities class actions, such as those involving Ponzi schemes and/or investment funds. Nine of the new filings in 2013 involved claims under the secondary market civil liability provisions of the provincial securities acts ("Bill 198" cases), continuing the pace of new filings seen in each of the past two years (eight in 2012 and nine in 2011).

A key development that may affect future securities class action trends is the February 2014 decision by a special five-judge panel of the Ontario Court of Appeal (OCA) convened to hear arguments in the context of the IMAX, CIBC, and Celestica cases on the issue of the limitation period for obtaining leave of the court to pursue Bill 198 claims.
"The panel's decision may be seen as resolving some of the questions regarding the application of the limitation period in Bill 198 cases that had followed the OCA’s decision in the Timminco case," said NERA Vice President Brad Heys. "It will be interesting to see the impacts this decision has on the number of new Bill 198 filings, the pace at which those cases proceed to the leave stage, and whether it leads to at least some cases going to trial."

Case Resolutions

The number of settlements in Canadian securities class actions doubled in 2013 to six (from three in 2012), the largest number since 2009. Five of the six 2013 settlements are Bill 198 cases. Only one case (Kinross Gold) was dismissed in 2013.

The median settlement amount was $8.6 million, with actual settlement amounts ranging from $1.9 million (Cathay Forest Products) to $15.25 million (SMART Technologies, the only non-Bill 198 case settled in 2013).

Active Cases

As of 31 December 2013, there were 54 Canadian securities class actions pending, marking the seventh year in a row that the number of pending cases has increased (there were 51 cases pending at the end of 2012). NERA's database now includes data for 111 Canadian securities class actions filed since 1997.

Canadian Securities Class Actions: Key Trends

  • Eight of the 10 2013 filings involved issuers with securities listed on the TSX; six of these issuers were also cross-listed on US exchanges.
  • Nine of the 10 cases filed in 2013 were Bill 198 cases, a trend in line with previous years.
  • As in previous years, the large majority of cases (eight out of 10) were filed in Ontario. Two of those cases were also filed in other provinces (the claim against BlackBerry Ltd. was also filed in Quebec, and the claim against Cash Store Financial Services Inc. was also filed in Quebec and Alberta). Of the two cases not filed in Ontario, one was filed only in Alberta (involving Donnybrook Energy Inc.) and the other only in Quebec (involving BioSyntech Inc.).
  • Nine Canadian-domiciled companies were the subject of a US securities class action during 2013; five of these companies are also the subject of a parallel Canadian securities class action.
  • Although cases brought against companies in the mining or oil and gas sectors accounted for the largest number of Canadian securities class action filings, the sector’s share of new cases filed declined substantially to 40% in 2013, from about two-thirds in 2012.
  • The median time from the end of the proposed class period to a 2013 filing was 2.1 months and the average was 10.6 months.

Class Action Trends Series

NERA has been analyzing trends in securities class actions for more than 20 years. In addition to this Canada Trends report, the firm produces annual US and UK Trends studies. This year-end study was authored by NERA Economic Consulting Senior Vice President Mark L. Berenblut, Vice President Bradley A. Heys, and Consultant Jacob Dwhytie.

Trends in Canadian Securities Class Actions: 2013 Update may be downloaded from here.


About NERA

NERA Economic Consulting ( is a global firm of experts dedicated to applying economic, finance, and quantitative principles to complex business and legal challenges. For over half a century, NERA's economists have been creating strategies, studies, reports, expert testimony, and policy recommendations for government authorities and the world's leading law firms and corporations. We bring academic rigor, objectivity, and real world industry experience to bear on issues arising from competition, regulation, public policy, strategy, finance, and litigation.

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