Trends in Canadian Securities Class Actions: 2016 Update

22 February 2017
By Bradley A. Heys & Robert Patton

In the latest edition of NERA’s annual study, Trends in Canadian Securities Class Actions: 2016 Update, we examine trends in securities class action filings and resolutions in the 2016 calendar year. The study’s co-authors, Director Bradley A. Heys and Associate Director Robert Patton, report that filings of Canadian securities class actions more than doubled in 2016, compared to 2015, but the pace of filings remains low relative to the period from 2010 through 2014.

In contrast, US filings in 2016 reached a high-water mark: the greatest number since the aftermath of the early 2000 dot-com crash. Much of the recent growth in US filings stems from merger-objection cases, a type of claim that has been absent from filings in Canada. However, US filings more comparable to Canadian ones have also risen in each of the past four years.

Highlights of the 2016 report:

Nine new Canadian securities class actions were filed in 2016, compared with four new filings in 2015, 13 cases filed in 2014, and 11 in 2013.
Seven of the nine new filings in 2016 were Statutory Secondary Market cases, representing a partial reversal of the sharp drop observed in 2015, when there were only four such cases.
Although six Canadian securities class actions were resolved during 2016, only two of these were resolved through a settlement, the lowest number since 2011. Three other cases were dismissed, and one was discontinued.
As of 31 December 2016, there were 54 active or unresolved securities class actions in Canada, which together represent more than $55 billion in claims. Of these, 34 are Statutory Secondary Market cases, representing more than $53 billion in claimed damages, or about 95% of the total outstanding claims.
Six of the nine new Canadian cases filed in 2016 also involve parallel class actions filed in the US. In addition, four other Canadian-domiciled companies were named as defendants in cases filed only in the US during 2016.

NERA’s proprietary database now includes a total of 138 Canadian securities class actions filed over the 20-year period of 1997 through 2016. This year’s report builds on our work analyzing trends in securities class actions for more than 25 years and underscores NERA’s commitment to offering advice in the areas of economics, securities, finance, and commerce. In addition to this Canadian trends report, the firm produces annual US and UK trends studies.

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