Lack Of Commonality Defeats Investor Class Action Alleging Breach Of Fiduciary Duty

• Published date: 13 November 2024
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
• Law Firm: Osler, Hoskin & Harcourt LLP
• Author: Mr Robert Carson and Tamara Kljakic

A recent Ontario Superior Court decision highlights the individual inquiries that often exist in proposed class actions involving investors and investment decisions. In Boal v. International Capital Management Inc.¹ ' a case alleging breach of fiduciary duty against an investment advisor for acting in a conflict of interest ' Justice Akbarali denied certification on the basis that the existence of a fiduciary duty, its content and its breach could not be determined in common across the proposed class.

Background and procedural history

The plaintiff alleged that the defendants, including an investment advisor, owed and breached fiduciary duties by failing to disclose the benefits they would derive from the transactions that they recommended to investors. There was no contest that certain defendants had breached the Mutual Fund Dealers Association of Canada (the MFDA) rules to which they were subject: some defendants had settled with the MFDA. The plaintiff sought disgorgement of the benefits that...