NERA Economic Consulting has released its annual study on Canadian securities class actions. It headlines the fact that there were a record number of active class actions (28). But some of the other trends it notes are as — if not more — interesting for class-action defense lawyers:
2010 was not substantially different from prior years.
In our 2009 update, we noted that Canadian securities class actions were continuing to mature. That year witnessed the certification of three class actions and the granting of leave to proceed under Part XXIII.1 of the Ontario Securities Act (OSA) in IMAX—rulings that we noted may ultimately prove to be an inflection point for this type of litigation. Although those judicial decisions may still prove to be a turning point, 2010 did not reveal any substantial upturn in filings or other trends as a result.
Canadian securities cases continue to focus on misrepresentations in accounting and operations.
Operational misrepresentations and accounting misrepresentations are historically the most common claims alleged by plaintiffs in Canadian securities class actions. This was also true for the cases filed in 2010, most of which involve allegations of operational misrepresentations, and two of which include allegations of accounting misrepresentations.
Canadian plaintiffs are getting faster at filing class actions.
Approximately one-third of the cases in our database of Canadian securities class actions were filed within two months of the end of the proposed class period, and almost two-thirds of all cases were filed within six months.
Cross-border class actions make up a significant portion of Canadian class actions.
As of 31 December 2010, there were a record 28 active Canadian securities class actions, representing approximately $15.9 billion in outstanding claims (including claims for punitive damages). Six of these are cross- border cases representing more than $11.6 billion in claims—about 73% of total claims. Excluding the $10 billion claim against CIBC, there is approximately $5.9 billion in outstanding claims, $1.6 billion (or 27%) of which are in cases with parallel US class actions.
NERA is not the only source to notice the cross-border trend (nor is it limited to securities cases), but it has done the best job of quantifying it. It also notes that in the wake of the US Supreme Court’s ruling in Morrison v. Australian National Bank, this trend may actually decline.
All in all, the report makes interesting reading. So go, read.