Summary of "Ramias v. Johnson et al."

Introduction

What duties do financial institutions potentially owe to third-party investors when their banking systems are used in an allegedly fraudulent scheme? Why can it be problematic to attempt to add a defendant on the basis of similar, if not the same, facts and claims as asserted against previously named defendants?

The decision of the Alberta Court of Queen's Bench in Ramias, as Representative Plaintiff v. Jerry Johnson et al. addresses two applications in the context of a proposed class action: (1) an application by a financial institution defendant to strike the claims against it; and (2) an application by the plaintiff to add three financial institutions to the action on the basis of the same claims made against the defendant and other previously named defendants. In determining these applications, the court considered the issue of the duties that financial institutions may owe third-party investors when their clients use their banking systems in