Canadian Securities Class Action Filings Dip in 2012, According to NERA Economic Consulting Report

  Canadian Securities Class Action Filings Dip in 2012, According to NERA
  Economic Consulting Report

Business Wire

TORONTO -- February 14, 2013

Filings of securities class actions in Canada declined to nine new cases
during 2012 from the record 15 new filings in 2011, and lower than the average
of 12 cases per year since 2008, according to NERA Economic Consulting’s
report released today, Trends in Canadian Securities Class Actions: 2012

All of the new filings for 2012 were shareholder class actions, and in
contrast to previous years’ filings, none involved allegations of Ponzi
schemes, claims relating to the credit crisis, or claims against North
American-listed Chinese companies. The abatement of these recent trends in
filings was consistent with the experience in the US during 2012. However,
none of the nine cases filed in Canada appear to be related to the surge in
merger objection cases seen in the US over the last three years.

Case Resolutions

Three securities class actions were settled in 2012 (excluding partial
settlements)—two Bill 198 cases (Article Glacier for $13.8 million and Gammon
Gold for $13.25 million) and one Ponzi scheme case (RBC settled claims
relating to the Earl Jones Ponzi scheme for $17 million). The median
settlement for all Canadian securities class action settlements (excluding
partial settlements) in NERA’s database is $13 million.

Notably in 2012, Ernst & Young agreed to pay $117 million to settle claims
relating to its role as auditor of Chinese company Sino-Forest. This partial
settlement, if approved, would represent the largest settlement in a Bill 198
case to date.

Active Cases

With nine new securities class actions filed and the resolution of five cases
during 2012, there were 51 active Canadian securities class actions as of 31
December. This is nearly double the number of active cases four years ago.
NERA’s database now includes data for 100 Canadian securities class actions
filed since 1997.

“The growing number of active cases on the docket and the recent court rulings
suggest that we may see both more cases move to the leave application and
certification stages and possibly more settlements in 2013 than we saw in
2012,” said NERA Vice President Bradley Heys, co-author of the report.

Canadian Securities Class Actions: Key Trends

  *Eight of the nine cases filed in 2012 involved issuers with securities
    listed on the TSX.
  *Bill 198 cases made up the majority of filings in 2012, accounting for
    eight of the nine cases filed—in line with previous years.
  *All of the cases filed in 2012 were filed in Ontario. Two cases
    (SNC-Lavalin and Agnico-Eagle) were also filed in Québec. The claims
    against Facebook and GLG Life Tech Corp were also filed in British
  *Six of the nine new class actions in 2012 also had parallel US filings:
    Angico-Eagle, BP p.l.c., Facebook, GLG Life Tech, Kinross Gold, and Nevsun
  *Two-thirds of the new cases filed in 2012 were brought against companies
    in the mining or oil and gas sectors.
  *Continuing a the trend toward faster filing, the median time to file from
    the end of the proposed class period to the date of filing for cases filed
    in 2012 was approximately 3.1 months, and the average was 4.6 months.
  *Two cases were dismissed during 2012—cases brought against Western Coal
    and CIBC.
  *55% of the 51 active cases are Bill 198 cases, representing more than $19
    billion in claimed damages.
  *US securities class actions filings were made against six
    Canadian-domiciled companies in 2012, bringing the total number of active
    US cases against Canadian-domiciled companies to 17.

Class Action Trends Series

NERA has been analyzing trends in securities class actions for more than 20
years. In addition to this Canada Trends report, the firm produces two US
Trends studies annually, as well as reports for the UK, Australia, Japan, and
Italy. This year-end study was authored by NERA Economic Consulting Senior
Vice President Mark L. Berenblut and Vice President Bradley A. Heys.

Trends in Canadian Securities Class Actions: 2012 Update may be downloaded

About NERA

NERA Economic Consulting ( is a global firm of experts dedicated
to applying economic, finance, and quantitative principles to complex business
and legal challenges. For over half a century, NERA's economists have been
creating strategies, studies, reports, expert testimony, and policy
recommendations for government authorities and the world's leading law firms
and corporations. We bring academic rigor, objectivity, and real world
industry experience to bear on business and legal issues involving
competition, regulation, public policy, strategy, finance, and litigation.

NERA's clients value our ability to apply and communicate state-of-the-art
approaches clearly and convincingly, our commitment to deliver unbiased
findings, and our reputation for quality and independence. Our clients rely on
the integrity and skills of our unparalleled team of economists and other
experts backed by the resources and reliability of one of the world's largest
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clients from more than 20 offices across North America, Europe, and Asia


NERA Economic Consulting
Benjamin Seggerson
Senior Manager, +1 202-466-9232
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