Mark, what do public companies have to be
aware of with regard
to potential liability from
misrepresentation?
Well, we've always had
statutory liability
for prospectus disclosure
and 
that liability is provided for in all of
the securities acts across the
country.
Around the end of 2005
though, we got
liability for secondary market
misrepresentation, so
potential liability to
shareholders who bought on the
stock exchanges in the secondary market.
- And
what's new and what's different about that
secondary market liability?
Well we've had a few years
to deal with it now, but 
the difference that it introduced
was that
it made available
class actions for secondary
market
misrepresentations because prior to that
those kinds of
class action proceedings just weren't
on the table for secondary market
liability because of the reliance
requirement. Under
our common law you had to be able
to prove reliance on the part of
each and every plaintiff with
respect to the misrepresentation that
they were complaining about.
This legislation
effectively deemed reliance on the
part of everyone who bought during the
relevant period, so
it created the opportunity for
class action litigation on that topic in
a way that, for example back in the days
of react
it was much more problematic
because of that reliance requirement.
And what industries is this particularly
relevant to?
Well this kind liability is
something that
any public company is potentially
vulnerable to.
There are a numbered industries I think
where
market participants have to be much more
acutely aware of it. I think the mining
industry is a good example
because of the nature of that industry
it's not uncommon
for there to be
press releases, public disclosures, 
change to
previous public disclosures. And 
you know, what the plaintiff class action
lawyers look for
is something that sounds like a
corrective disclosure,
with a corresponding drop in the share price.
When they see that,
they get interested. And the mining
industry is one where,
not because there's been a
misrepresentation, but
just because of the changing nature of
the way a project evolves it's not
that uncommon for you to have a public
disclosure changes something
that you disclosed in the past.
And people are always fascinated about the
difference between
Canada and the U.S. Are there legal
differences in the way that this matter is
handled between Canada and the United
States?
Yes, there are a number of
pretty significant differences.
The U.S. has had this kind of liability
on the books for a long time so they've
got a very well developed
set of principles around it.
One very significant difference is
in the U.S., they have a motion to dismiss
procedure that allows the defendant
to move to strike out the claim at a very
preliminary stage 
just based upon the pleadings themselves.
In Canada,
we can only do that in the context of
the leave motion
to commence the claim and the
certification motion, which are usually
bundled together. So
that creates a great deal of expense for
a defendant before you can even get to
that
motion to dismiss.
A related point to that is that most
of the motions to dismiss in the U.S.
are based upon their,
what they call the see-enter requirement,
which is a legal requirement that
the case can only proceed
if the plaintiff can plead and prove
that the defendants knew that the
misrepresentation was untrue.
That is not a requirement under
our
statutory liability.
In Canada, negligence is enough, and
that's not very difficult for a
plaintiff plead
at that preliminary stage.
Despite these differences in the law in
Canada and the United States, we do sometimes
see copycat actions, right?
That's quite a common
phenomenon, and it usually runs
north in the sense that
when you have a cross-listed
company that's trading both in
Toronto and in New York,
once there's a triggering event that
gets the interest of the plaintiff's
lawyers,
quite often the american class-action
plaintiff's lawyers are first-off the
mark,
they commence a case in the states or
many many cases in the states
and usually within
a week or two,
maybe a little more,
we see a copycat case commenced in
Canada.
And quite often it's
downloaded off the internet and issued
in our court office.
This raises very
significant issues for
companies that are the subject of those
lawsuits because what they need is 
coordinated defense on both sides of the
border to try to
principally avoid
duplication of effort and
coordinate the defense in a way that's
going to
maximize the chances of success at both
ends of the litigation.
