Finance, minerals, and energy have been the main sectors facing this type of class action in Canada over the past four years, according to the study. Eight securities class actions were certified in 2010 alone, while five were settled, with defendants paying $67.6 million.
“The average settlement for these cases was $13.5 million and the median settlement was $10 million — compared to the average and median settlement of $9 million in 2009,” the study’s authors note.
In addition to class actions at home, many Canadian-based companies face class actions in the United States. As of the end of 2010, “there are 13 active U.S. securities class actions against Canadian-domiciled companies, three of which also have parallel Canadian class actions,” says the study.
However, the study also says the U.S. litigation risk for Canadian companies may be somewhat reduced following the June 2010 decision by the U.S. Supreme Court in Morrison v. National Australia Bank, which places limits on U.S. private securities litigation relating to trading of securities outside the United States.
Of course we have been looking at cross-border class actions in-depth, and this still does not mean that class actions that are similar to those filed in the U.S. can’t be brought up in front of Canadian judges.
NERA’s study confirms the increasing trend for class actions in general in Canada, something that is likely to become global in nature as more jurisdictions consider introducing the ability to file class actions.