February 10, 2015
Sixty cases outstanding, 11 new ones filed in 2014
Canada continues to see a rising number of class-action lawsuits filed against companies by angry shareholders, with a total of 60 cases – representing $35-billion in claims – now working their way through the courts.
Eleven new cases were filed in 2014, which is consistent with the average number of new filings over the past five years. One existing case was dismissed and six were settled, for an average payout of $6.4-million.
The numbers, from an annual report on securities class actions in Canada being released by NERA Economic Consulting on Tuesday, show a slow but steady increase in the number of cases in Canada.
The increase begins when Ontario first changed its legislation in 2005 to make it easier for shareholders who bought stock on an exchange to sue a company for misrepresenting its financial results.
No such case has made it to a full trial. But several large cases – filed by shareholders against Canadian Imperial Bank of Commerce, Celestica Inc. and Imax Corp. – were before the Supreme Court of Canada this week.
Depending on the outcome, the eventual decision could cause more or fewer filings in the years to come, said NERA vice-president Bradley Hayes.
And while he wouldn't predict what next year will bring, he also points out that the number of U.S. cases tends to increase in times of economic volatility, such as the current turmoil caused by sinking oil prices.
"In the U.S., where there's a much longer history, we've see a spike in filings after things like the dot-com bubble or the credit crisis," Mr. Hayes said in an interview. "We haven't had that much history in Canada yet."