As a law student, you may have heard that certain statistics are skewed by the reality that many cases are settled instead of being resolved in court. While the benefits to settlement are numerous, it has the primary disadvantage of keeping in the dark a great deal of important data. Thankfully, the Institutional Shareholder Services group of companies (ISS), specifically ISS Securities Class Action Services, compiled and released a list of the top 25 largest Canadian securities class action lawsuit settlements to date back in May 2018.
The list is based on a database of cases consisting of 172 Canadian securities class action suits with the earliest dating back to 1997. Of the 172 cases, 91 settlements have resulted. As one would reasonably expect, the top Canadian securities settlements fall quite far below the numbers seen in the U.S., with only three of the settlements on the Canadian list being large enough to be on the top 100 U.S. securities settlements. Even the disparity among these top three settlements in Canada is astounding. The largest is the Nortel Networks case in 2006 at $986.3 million, followed by the 2008 settlement of Portus Alternative Asset Management for $490.6 million, and finally the Sino-Forest settlement valued at $154.7 million.
Only four of the top 25 settlements in Canada are above $100 million. A total of 16 of the settlements are valued at over $20 million, and the smallest of the 25 is a mere $12.9 million. The settlements were concentrated in Ontario, Quebec and British Columbia, each having resolved 52%, 31% and 7% of settlements respectively. Interestingly, of the top five largest settlements, only one was finalized in the past decade (four out of five being settled prior to 2008).
A commenting Canadian plaintiff lawyer made the following remark in the report, “we expect the number of securities class actions filed and settled in Canada to steadily grow in the next five years… The reluctance of U.S. courts to take jurisdiction over persons who purchased their securities on overseas exchanges will be a key drive in this shift”. This comment suggests that Canada may be a fall-back market for cases that cannot be pushed through the U.S. The report also highlights that the top markets for securities class action litigation include the U.S., Canada, Australia, Taiwan and the Netherlands.
If you are interested in reading the report: https://www.issgovernance.com/library/the-top-25-canada-mid-2018/
