In some class action lawsuits, regulatory compensation may also be generated through a parallel action. It used to be that companies could essentially mask their own responsibility with this compensation, saying they should not have to pay any more since they’d already paid out. This could hinder the action that was taken by the class action lawsuit.
The problem was that the compensation generated by the regulatory action wasn’t always realistically enough. People would not feel that they got a fair amount, but they were then blocked from seeking more because the small payout had been made.
However, things have changed. The Supreme Court of Canada ruled that regulatory compensation does not always satisfy a company’s full financial obligation to those who have been harmed. In cases in which it is deemed to be too little, those people can seek further compensation through class action lawsuits and could be legally entitled to win both cases and take both payouts.
The argument against the old system is that access to justice was not actually allowed for those who had suffered damages — such as investors. This was considered an unneeded limitation on the court system that actually undermined what the court intended to do in the first place. It’s clear that the Supreme Court agreed with this position and decided to put the emphasis more firmly on ensuring that complete justice is handed out.
It’s quite important for those who are seeking damages to know about this change so that they really understand what legal options they have. Don’t let full compensation go to waste, even when regulatory compensation has already been provided.
Source: Rochon Genova, “Victory for Access to Justice in Supreme Court of Canada “Market Timing” Decision,” accessed June 03, 2016