In this interview about trends in securities class actions, securities litigator Brian Radnoff observed that it wasn’t surprising there were fewer securities class actions filed in Canada in 2012 than in years prior.
“The greatest cause of the decrease is the fact that markets were generally stable, if not good, in Canada in 2012,” says Brian. “The greatest driver of securities class actions are poor markets, particularly after market bubbles, when equities can fall considerably.
“In general, this news is consistent with the typical cycles one would expect to see and the relationship between securities class actions and what is going on in the markets,” says Brian. “A secondary reason is likely the growing experience in Ontario with secondary market claims and the difficulties plaintiffs’ counsel have experienced in getting leave to bring them. Plaintiffs’ counsel are likely becoming more selective about the cases that are brought and the difficult requirements for leave to bring such claims have been better defined by the courts.”
Brian believes that the current trend will not continue as institutional investors become more involved in securities litigation.