Law Times

Law timeS • September 3, 2012 Fischer opens door wider to plaintiffs Court rules regulatory matters don't trump class action remedies FOCUS agement Ltd., a case in which the Ontario Court of Appeal upheld the certifi cation of a class action against fi ve defendant mutual fund managers. Th e Ontario court' T he Supreme Court of Canada has granted leave to appeal in Fisch- er v. IG Investment Man- BY JULIUS MELNITZER For Law Times easily displaced by opaque procedures which provide no meaningful direct rights of participation to victims of corporate wrongdoing, which rocked Bay Street and has potentially broad implica- tions for class actions gener- ally, stems from the mutual fund market-timing debacle of 2004. Th e Court of Appeal concluded the settlement of regulatory en- forcement proceedings against the funds in which they paid $205 million to investors — less than the full value of their dam- ages — didn't oust class action remedies in the civil courts. "Fischer engages a very im- s ruling, portant issue involving matters of principle to which each of the three courts that pronounced on it in this case have taken a very diff erent approach," says Benja- min Zarnett of Toronto' mans LLP, who with colleagues Jessica Kimmel and Melanie Ouanounou represents CI Mu- tual Funds Inc. Joel Rochon of Rochon s Good- preme Court upholds it, means the lawsuit against CI and AIC Ltd. can proceed to trial. Th e other defendants, IG Investment Man- agement Ltd., Franklin Templeton Invest- ments Corp., and AGF Funds Inc., weren't involved in the appeal as they chose to settle the class action suits. But the case' Th e Court of Appeal ruling, if the Su- " he says. curities matters. Indeed, the principle that the mere existence of a regulatory remedy for wrongdoing doesn't oust class action rem- edies has wide repercussions. "Th e Class Proceedings Act requires that s impact isn't confi ned to se- a class action be the preferable procedure for resolving a dispute before it can be certifi ed, says Zarnett. "So arguably, Fischer could ap- ply in any case where companies are holding up an alternative process, whether it' " tory or voluntary, as a preferable alternative to a class action." Fischer arose when the Ontario Securities s regula- Commission commenced proceedings against the fi ve defendant funds for failing to act in the public interest in relation to mar- ket-timing activity in their funds. Th e regulatory proceed- ings ended when the funds agreed to pay $205 million to aggrieved investors. All of the settlements speci- fi ed they were without prejudice to the rights of investors to bring civil suits against the mutual fund managers with respect to the same subject matter. Dennis Fischer and oth- full compensation to the investors. In January 2010, Justice er representative plaintiff s initiated the class action aſt er the OSC proceedings ended. Th e plaintiff s sought to recover the diff erence between the OSC settlement and the hundreds of millions of additional dol- lars they maintained were necessary to make 'Class actions will not be easily displaced by opaque procedures which provide no meaningful direct rights of participation to victims of corporate wrongdoing,' says Joel Rochon. Paul Perell of the Ontario Superior Court of Justice refused to certify the case, but the Divisional Court reversed his ruling. Th e Court of Appeal upheld the Divisional Court result but on diff erent reasoning that leſt little doubt that it wouldn't tolerate judicial constructs that made it more diffi cult for plaintiff s to satisfy the test for pref- erable procedure. "Th e Court of Appeal' PAGE 11 open — and maybe a little wider open — than it has ever been for plaintiff s," says Kirk Baert of Toronto' reasons are an aggressive restatement of the prefer- able procedure test that keeps the door as wide represents plaintiff s in class actions. s Koskie Minsky LLP, who LT s "McKellar Genova LLP, who with col- leagues Peter Jervis and Sakie Tambakos represented the class, says the decision provides "long- awaited crisp guidance to judges, lawyers, and corporations as to the critical role class actions play in providing for access to justice" in the context of securities cases. "Class actions will not be provided peace of mind for the rest of my life." LEANDRE CASSELMAN Development Coordinator Now you're sure. The McKellar Structured Settlement™ Financial security. Guaranteed payments. 100% tax free. Some decisions are easy. Untitled-4 1 www.lawtimesnews.com 12-08-28 3:51 PM

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