Key Takeaways From 2021 Ontario Securities Class Action Decisions

We summarize in this bulletin key securities class action decisions from the last year. These decisions underscore the following:

• Whether a statement or announcement amounts to a material misrepresentation or a corrective disclosure requires more than a literal interpretation and calls for a deeper and contextual assessment of how the statement may be understood by market participants.
• General disclosure of litigation risk may be inadequate to disclose the specific risks associated with a particular legal proceeding.
• What amounts to a material change continues to be highly fact-specific, and there continues to be no bright-line test.

The courts also provided greater certainty on enforcing indemnity clauses in underwriting agreements for defence costs in class actions where there are allegations of intentional wrongdoing.