An investor legal clinic at Osgoode Hall Law School has released its first ever annual report, revealing that clients accessing the clinic’s services often face access to justice issues such as language barriers, lack of financial resources and a scarcity of securities law and financial investment knowledge.
An investor legal clinic at Osgoode Hall Law School has released its first ever annual report, revealing that clients accessing the clinic’s services often face access to justice issues such as language barriers, lack of financial resources and a scarcity of securities law and financial investment knowledge.
The Investor Protection Clinic also revealed that half of its clients are between the ages of 50 and 70 — likely because people in that demographic are thinking about retirement and their savings, says the clinic’s academic director, Poonam Puri.
“What stands out to us, after having spent a year working on our clinic files, is that there is a lot of investment activity that ordinary Canadians are undertaking, without having a deep appreciation of the role that their registered advisor is supposed to play and the protections that are out there for them,” she says.
In the clinic's first year of operation, Puri says, she observed many people seeking a financial advisor or investment opportunities through community or cultural ties and, often, these weren’t actually registered advisors or proper investment opportunities. This makes it difficult to know if there had been any previous complaints.
“One of the files that we showcase in the annual report is an individual who invested $60,000 in an organization run by a respected cultural leader,” she says. “We’ve actually filed a statement of claim [for this person] and we’re waiting to see what the defence may be. The students will be involved in any work leading up to the actual hearing.”
The Investment Industry Regulatory Organization of Canada offers an online database that provides important information on all individuals registered with the regulatory group, including records of discipline, qualifications and employment history.
Ron Podolny, a partner at Rochon Genova LLP and a supervising lawyer at the clinic, says many of the cases are too small to take on contingency or many victims of investment fraud cannot afford to hire a lawyer. The clinic has helped to address this gap, especially as most of the clients are within retirement age.
“It may be that they’re more vulnerable because they’re approaching retirement. They don’t have time to compensate for investment losses or losses from fraud,” he says. “They may be more likely to seek legal help and it may be that a young person would forgo the legal help and just decide to make up for the [lost money].”
Another gap Podolny sees is in protection for adverse cause. If a client were to launch a civil suit, like any other litigant, they would be exposed to adverse cost risk if they lose. There would also be expenses and disbursements involved.
He says if the clinic’s budget were to grow, it could better help address this gap by helping clients offset costs. For example, if a client who is a victim of fraud needed to hire an investigator to help recover where their assets were hidden, this would be possible.
In terms of the language barrier, Puri says the clinic is currently in the process of creating videos in a variety of languages, to be posted on its website, providing the preliminary steps to using the clinic’s services. For now, the clinic uses student volunteer translators.
With the new data, the Investor Protection Clinic could learn and continue to improve for the coming years.
“I think it’s a great opportunity to provide students with a real look into what securities law is, what it means and how it affects not just people who are millionaires but ordinary people who are just trying to get by and make a living for themselves,” says Vahini Sathiamoorthy, a 2L student at Osgoode Hall and student caseworker at the clinic. “It’s a pretty unique opportunity in terms of being able to support and provide access to justice.”
Editor's note: Story updated Oct. 23 to add the addition of IIROC link.
