Supreme Court of Canada grants leave to appeal in market timing class action and declines to hear appeal of wireless service providers in class action over "system access fees"

June 29, 2012

On Thursday, the Supreme Court of Canada granted leave to appeal the Court of Appeal for Ontario’s decision in Fischer v. IG Investment Management which upheld certification of a class action alleging that the defendant mutual fund managers permitted securities market conduct called “market timing” in certain of the mutual funds that they managed resulting in hundreds of millions of dollars in losses to long-term investors.  Even though the defendants had entered into settlement agreements with the Ontario Securities Commission (OSC) in which they paid $205.6 million to aggrieved investors prior to the commencement of the class action, the Court of Appeal held that capital markets participants that settle complaints with the OSC may still be subject to class action lawsuits because regulatory proceedings may not be the preferable procedure for resolving the issues of investors. Our blog post on the Court of Appeal decision can be found here.

While leave to appeal the market timing case was granted, the Supreme Court declined to hear the appeal of wireless service providers from the Court of Appeal for Saskatchewan’s decision in Microcell Communications Inc. v. Frey which upheld certification of a class action for unjust enrichment to recover fees described as “system access fees”, “system administration fees”, “licence administration fees” or “system licence administration fees” alleged to have been wrongfully collected.  The class action seeks several billion dollars in compensation for class members over a period of approximately 20 years.  Leave having been denied by the Supreme Court of Canada, the case can now go forward for determination on its merits.

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