To File Or Not To File Evidence? That Is The Question For Defendants Facing Securities Class Actions

The Supreme Court of Canada has confirmed that the test for leave to pursue a statutory claim for secondary market misrepresentation is "more than a speed bump." For defendants, this means there may be an opportunity to "do battle [at] the outset" and mount an aggressive opposition to a motion for leave. This likely involves filing substantive responding evidence. But how does a defendant decide whether this is the right strategy? Whether to file evidence in response to a leave motion is a difficult strategic decision often faced by defendants in securities class actions.

Early Trend – Minimal Evidence Filed by Defendants

Based on the early jurisprudence, the test for leave was thought to be a relatively low threshold. Courts treated the statutory requirement that the plaintiff establish a "reasonable possibility that the action will be resolved at trial in [its] favour" as a bar that could be easily surpassed. This meant that defendants would often not file any