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An annual count of shareholder class actions in Canada confirms that the number of cases pitting investors against companies continues to grow.

The report, which you can download here from NERA Consulting, says that 15 new shareholder class actions were filed in Canada last year. The numbers filed each year jump around a bit, but the previous high was 12 in 2008.

Among the most prominent such cases at the moment is of course the one targeting Sino-Forest Corp., which was accused last year of fraud by a short seller and is being investigated by the Ontario Securities Commission and the RCMP.

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NERA says three of 2011's 15 new cases involve Chinese companies trading on Canadian exchanges. (The U.S. has seen several such cases. A new U.S. lawsuit was also just filed against Sino-Forest this week.)

The study's authors say the numbers show the continued impact of legislative changes made in Ontario in 2005 that made it easier for shareholders who bought stock on exchanges to sue when they feel a company has misled the markets.

In all, the new cases mean there was a total of 45 Canadian securities class actions as of the end of last year, with plaintiffs demanding about $24.5-billion. Since 2005, 10 cases have been settled for a total of $100-million, NERA says.

Study co-author Bradley Heys acknowledged the absolute number of Canadian cases was not yet large, and is still well shy of the U.S. numbers, proportionately, given the size of the Canadian capital markets. He says that more court rulings in the area establishing the ground rules may help determine whether the future will bring a flood or a trickle of securities class actions to Canada.

Plus, the recent U.S. Supreme Court rulling in a case called Morrison v. National Australia Bank, which makes it harder for foreigners to sue in U.S. courts, could mean more parallel cases in Canada for investors north of the border, Mr. Heys said.

"It's a bit of an uptick," he said. "It's interesting to watch it evolve."

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Toronto City Hall Reporter

Jeff Gray is The Globe and Mail’s Toronto City Hall reporter. He has worked at The Globe since 1998. From 2010 to 2016, he was the law reporter in Report on Business, covering Bay Street law firms and white-collar crime. He won an honourable mention at the National Magazine Awards for investigative journalism in 2010. More

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