Caveat Counsel: Care and Caution in the Boardroom

A joint publication of our Securities Litigation, Securities, Class Action and Corporate Governance Groups.

A securities class action certification decision handed down by the Ontario Superior Court of Justice in December 2009, Allen v. Aspen Group Resources Corporation, et al., is attracting attention from the perspective of potential liability for law firms. Although not a merits-based decision, the Court's analysis will prompt law firms and boards of directors of public corporations to review their policies and practices in light of the court's conclusion that the plaintiff's claim, that a law firm may be responsible for the statutory civil liability under section 131(1) of the OSA of one of its partners serving both as a director of the corporation and legal counsel to the corporation, is not unsustainable in law and is a cause of action that can proceed to trial on its merits.