While securities class actions are becoming rarer stateside, our neighbors to the north are seeing a bit of a boom.
The increase seems small by American standards—in 2011, Canadian lawyers filed 15 securities class action suits, the most ever in one year, while lawyers filed 188 such suits in the U.S. But by the end of 2011, there were 45 active cases pending in Canada, more than twice the number at the end of 2007 and four times that at the end of 2000.
The upswing in Canadian securities class actions is largely due to a 2005 amendment to an Ontario law that makes it easier for investors to sue publicly traded companies. As a result, many U.S. plaintiffs lawyers are looking for business opportunities up north. (See our guide to doing business in Canada from the November 2011 issue of InsideCounsel.)
Lawyers who are looking to try their hand at securities class actions in Canada, though, should be aware that the country has a “loser pays” system, meaning whoever loses the suit has to cover the winner’s legal fees, a penalty which may give some lawyers pause before deciding to take on a case.