Class Actions: Top Ontario And Federal Cases In Q3 2025

• Published date: 27 October 2025
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation, Professional Negligence
• Law Firm: Aird & Berlis LLP
• Author: Mr Steve J. Tenai and Kate Findlay

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Q3 2025 brought a range of important legal decisions shaping Ontario and federal class actions. Our summary of key rulings from the quarter includes several appellate decisions providing guidance on public correction for securities class actions, collective liability of sports teams for league abuses, means of demonstrating an identifiable class prior to the expiry of the opt-out period, implied warranty claims against manufacturers premised on marketing materials to purchasers and evidentiary challenges for misclassification cases. We also highlight a sequencing decision to hear a motion seeking to stay individual proceedings prior to certification.

Click the links below to access our class action summaries:

• Identifying a Public Correction for Statutory Secondary Market Misrepresentation
• Member Sports Teams' Liability for League Abuses Left Open to Pursue
• When and How a Class Must Be Identifiable
• Sequencing: Pre-Certification Motion to Stay Individual Actions
• Advertising Statements Do Not Make Non-Direct Sellers Liable for Implied Warranty Claims Under the Sale of Goods Act?
• Evidence of Commonality in Misclassification Case Involving Temporary Worker

Identifying a Public Correction for Statutory Secondary Market Misrepresentation

A public correction establishes an endpoint for market distortion caused by a misrepresentation. It further defines the class of putative class members and plays a key role in the securities statutory formula for the calculation of damages. The test for identifying public corrections is whether the disclosures identify misleading or erroneous prior statements. A disclosure that does not expressly correct a prior statement, or is not followed by a statistically significant decline in the price of an issuer's securities, may still constitute a public correction. The Ontario Court of Appeal in Terry Longair Professional Corporation v. Akumin Inc., 2025 ONCA 606, underscored that what is important for a public correction is the materiality of the misrepresentation and not the materiality of the correction.

On August 15, 2021, Akumin announced that it would be late in filing its second quarter financial statements, commenting that additional information and analysis was necessary relating to "potential additional credit losses with respect to prior years." The next day, its common shares' price fell by about 20 per cent. On October 12, 2021, Akumin announced that, upon further review, it had identified errors in the calculation of credit losses or writeoffs on accounts receivable for prior years and that it would be restating its annual financial statements for 2019 and 2020 as well as its Q1 2021 financial statements. It also announced that it had identified other errors in the capitalization of expenses that were expected to reduce the net book value of property plant and equipment by an amount yet to be quantified. In the two days that followed this announcement, there was a further decline in the stock price of Akumin's common shares by about 12 per cent. It was on November 8, 2021, that Akumin advised that while the quantum of the adjustment to property plant and equipment was still being quantified, it was expected to result in a reduction to its net book value of approximately $19 million. A few days later, on November 15, 2021, Akumin announced that it had filed restated financial statements for the 2019 and 2020 years and released its Q1 2021 financial statements. There was no statistically significant decline in Akumin's stock price following the announcements on November 8 and 15, 2021.

On appeal, among other grounds, Akumin submitted that the certification judge erred in finding that the August 15, 2021, announcement constituted a public correction as there was no connection to an alleged misrepresentation. It further submitted that the October 12, November 8 and November 15, 2021, announcements were incorrectly held to be public corrections even though they were not followed by a statistically significant decline in Akumin's stock price.

Referencing its earlier decision in Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund v. Barrick Gold Corporation, 2021 ONCA 104, the Ontario Court of Appeal commented that the fact the alleged public correction did not expressly identify a prior misstatement is not conclusive on the issue of a whether a public correction arose. One must consider the announcement in context and surrounding circumstances. By doing so, a court may conclude that the announcement was capable of being understood as revealing to the market the existence of an untrue statement of a material fact. In this case, the appeal court agreed with the motion judge that the August 15, 2021, announcement alerted the market that Akumin's previous financial reporting on credit losses could no longer be relied upon.

The court further rejected Akumin's submission that the leave judge erred with respect to the October 12, November 8 and November 15, 2021, announcements. Whether a statement constitutes a public correction does not require that it be followed by a statistically significant decline in the stock price. While market reaction to an announcement can be probative on the question of whether a prior statement was material, there is no materiality analysis for a public correction. In all cases, the appellate court commented, the inquiry should be: "Did the alleged correction actually correct the alleged misrepresentation or not?" All four announcements identified misleading or incorrect statements in Akumin's prior financial statements, thereby establishing that they were public corrections.

Akumin's added argument, that an announcement can only constitute a public correction for purposes of statutory secondary market liability if the corrective statement relates to securities that trade in an "efficient market," was also rejected by the court. This conclusion was based on the literal wording of the statute. The court did not engage in aspects of the statutory secondary market regime as premised on an efficient market for securities.

Last, and importantly, the court dismissed the argument that the motion judge erred by finding that a...