Class Actions Against Law Firms on the Horizon

Three cases that are making their way through the Ontario court system have a few things in common: they’re all recent, all under the Class Proceedings Act, they’re all significant claims and they all name prominent Toronto law firms as defendants.

Here, for the record, are the foundation documents in the three proceedings:

The first is a case styled Allen v. Aspen Group Resources Corporation et al. in connection with a Takeover Bid for Endeavour Resources Inc. The pleadings name as co-defendants a Weir Foulds partner individually, as well as the firm, which acted for Aspen. The class action was certified by Strathy J on December 4, 2009. It will explore the roles of a lawyer who also acts as a director of a company, and whether professional liability is engaged.

The next case has similarly been certified: Robinson v. Rochester Financial Group. It’s a claim by investors in a leveraged charitable deduction scheme that was disallowed by the Canada Revenue Agency. Fraser Milner Casgrain allegedly issued an opinion on the tax issues, and is named as a co-defendant. The opinion contained a clause limiting reliance, and it was admitted on cross-examination that the plaintiffs hadn’t actually read the opinion. The class action was certified by Lax J on January 19 of this year. A motion seeking leave to appeal from the decision of Madam Justice Lax will be heard on March 24, 2010

The final class action has only been commenced, and all that is available is the plaintiffs’ statement of claim in the GM Dealers Class Action, alleging breaches of franchise legislation. The case names GM but also Cassels Brock and two of its partners and alleges a conflict of interest in Cassels Brock’s representation of dealers in the travails of GM last year. It has attracted attention because of the amount claimed – damages in an amount to be assessed, not exceeding $750,000,000.00.

All of these cases are far from over – and will doubtless will be strongly defended.

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