LITIGATION UNLEASHED - Stikeman Elliott

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• that certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection included in the forward-looking information. Having done this, the person must then direct his or her listeners to additional information contained in a “readily-available document” or part of a document. For the purposes of the Act, a document filed with the OSC counts as a “readily-available document”. 2.3.3 The plaintiff knew anyway No liability will attach to a defendant with respect to a misrepresentation or a failure to make timely disclosure if the defendant can prove that the plaintiff acquired or disposed of the issuer’s security (i) “with knowledge” that the document or public oral statement contained a misrepresentation or (ii) “with knowledge” of the material change, as applicable. 2.3.4 Material change confidentially disclosed to OSC There is no liability for failing to make timely disclosure if: • the defendant proves that the material change was disclosed in a material change report filed with the OSC on a confidential basis; • the issuer had a reasonable basis for making the disclosure on a confidential basis; • public disclosure of the material change was made promptly when the basis for confidentiality ceased to exist; • no document was released and public oral statement was made during the confidential filing period that contained a misrepresentation due to the undisclosed material change; and • where the material change became publicly known in a manner other than the manner required under the Securities Act, the issuer publicly disclosed the material change promptly. 2.3.5 Reliance on experts No liability will attach to a defendant with respect to any part of a document or public oral statement that includes, summarizes or quotes from a report, statement or opinion made by the expert if the expert has provided its written consent to the use of the report, statement or opinion. The defence is not available to the expert on whom reliance was placed. A defendant cannot use this defence if it knew or had reasonable grounds to believe that there was a misrepresentation or if the disclosure did not “fairly represent” the expert’s report, statement or opinion. 20 LITIGATION UNLEASHED STIKEMAN ELLIOTT LLP
2.3.6 Corrective action taken Potential defendants, other than responsible issuers, are not liable with respect to misrepresentations and failures to make timely disclosure made without their knowledge or consent if they take prompt corrective action by promptly advising the board of directors of the responsible issuer of the misrepresentation or failure and, if no correction or disclosure is made within two business days, promptly advising the OSC in writing of the misrepresentation or failure. Defendants who are prohibited by law or professional confidentiality rules from disclosing this information to the OSC are not required to make disclosure to the OSC in order to satisfy the defence. 2.3.7 Reliance on documents filed by other public companies There is no liability for an oral or documentary misrepresentation where the defendant proves that: • the misrepresentation was also contained in a document filed by or on behalf of another person or company, other than the responsible issuer, with the OSC or any other securities regulator in Canada, or with any stock exchange, without having been subsequently corrected, prior to the defendant’s repetition of the misrepresentation, by filing a correction with the relevant regulator or exchange; • the defendant’s document or public oral statement contained a reference identifying the document that was the source of the misrepresentation; and • when the document was released or the public oral statement was made, the person or company did not know and had no reasonable grounds to believe that the document or public oral statement contained a misrepresentation. The amendments refer to this as derivative information. 2.4 Damages Under the amendments, persons who acquire or dispose of an issuer’s securities while there is an uncorrected misrepresentation, or a failure to disclose a material change on a timely basis, may recover damages. The damages available are limited in three ways: • The damages must be calculated in accordance with the formulae set out in the amendments. • The court is required to fix the proportionate share of those damages payable by each defendant found liable, recovery against each defendant being limited, subject to certain exceptions, to its respective share of the total damages assessed for all plaintiffs after applying the formulae. • The amount payable by each particular defendant found liable may be further limited, again subject to certain exceptions, to various liability limits specific to each category of defendant. These three limitations are discussed in the following subsections. STIKEMAN ELLIOTT LLP LITIGATION UNLEASHED 21
Page 1 and 2: LITIGATION UNLEASHED A Guide to Ont
Page 3 and 4: TABLE OF CONTENTS 1 INTRODUCTION .
Page 5 and 6: 1 INTRODUCTION 1.1 What is Bill 198
Page 7 and 8: 2 THE NEW STATUTORY CIVIL LIABILITY
Page 9 and 10: 2.2 Causes of action 2.2.1 Introduc
Page 11 and 12: Where document released by influent
Page 13 and 14: • any director or officer of the
Page 15 and 16: on the part of the issuer. Gross mi
Page 17 and 18: Documents and public oral statement
Page 19: • in the case of a failure to mak
Page 23 and 24: the price paid to repurchase them.
Page 25 and 26: stages of the proceeding, including
Page 27 and 28: 3.1.3 New violations The amendments
Page 29 and 30: • ordered to pay the OSC’s cost
Page 31 and 32: - analyst calls and meetings, - pro
Page 33 and 34: • having counsel review the exist
Page 35 and 36: 5 CONCLUSION Whether, by allowing f
Page 37 and 38: A Major amendments to the Securitie
Page 39 and 40: A (b) in the case of a director or
Page 41 and 42: A (b) the person who made the publi
Page 43 and 44: A (g) the period within which discl
Page 45 and 46: A (b) if no correction of the misre
Page 47 and 48: A Same (2) Subsection (1) does not
Page 49 and 50: Summary of Liabilities B APPENDIX
Page 51 and 52: SUMMARY OF LIABILITIES B-2 TYPE OF
Page 53 and 54: SUMMARY OF LIABILITIES B-3 Director
Page 55 and 56: SUMMARY OF LIABILITIES B-4 TYPE OF
Page 57 and 58: SUMMARY OF LIABILITIES B-5 Director
Page 59 and 60: Summary of Defences C APPENDIX
Page 61 and 62: SUMMARY OF DEFENCES C NAME OF DEFEN
Page 67 and 68: Calculating Damages D APPENDIX
Page 69 and 70: Limits on Damages E APPENDIX
Page 71 and 72:
Proposed Corporate Governance Rules
Page 73 and 74:
F Issuers that comply with U.S. fed
Page 75:
For more information, please call y
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LITIGATION UNLEASHED - Stikeman Elliott

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