Proposed class proceeding arises from a landslide at a mine in Turkey
The Superior Court of Justice of Ontario recently granted carriage of a proposed securities class action relating to a landslide at a mine in Turkey to Strosberg Sasso Sutts LLP (SSS) over Berger Montague (Canada) PC (BMC).
Last Feb. 13, a landslide occurred at SSR Mining, Inc.’s Çöpler Mine in Erzincan, Turkey. The incident caused nine fatalities, many injuries, and significant environmental damage. The accident prompted the two law firms to bring proposed class proceedings against SSR.
The claims alleged that SSR made material misrepresentations in its public disclosures about the mine’s safety and management. The claims also said that accurate reports could have avoided or mitigated the disaster, would have shown SSR’s increased risk of loss, and would have led to trading of SSR’s securities at a much lower price.
A carriage dispute over which firm would be class counsel arose under s. 13.1 of Ontario’s Class Proceedings Act, 1992. The decision hinged on four factors:
SSS presented a third-party funding agreement covering the expenses of the action and indemnifying the representative plaintiff for any adverse cost awards. BMC, on the other hand, planned to self-fund the action and cited its successful track record of financing its own clients without external assistance.
In Liang v. SSR Mining, Inc., 2024 ONSC 4432, the Ontario Superior Court of Justice stayed BMC’s proposed class proceeding and let SSS proceed with its litigation on behalf of any affected investors. The proposed class action of SSS showed a more advanced stage of development and a greater investment of resources, the court decided.
Regarding the first factor, which involved the funding of the proceedings, the court found the approaches of both firms acceptable. Both firms have proven their financial capabilities in past cases, the court noted.
On the second and third factors, the court found little difference between the two actions in terms of their likelihood of success and the accomplishments of their lawyers. Both proceedings would focus on alleged misrepresentations under Ontario’s securities legislation and would face similar challenges, including certification and obtaining leave to proceed under the legislation.
However, the court found a distinction between the two actions in terms of the fourth factor, namely their stage of development. SSS filed its action on Mar. 6, while BMC brought its action on May 1. This head start allowed SSS to progress further in building its case, including by launching a website to keep potential class members informed.
The court noted that SSS retained a Turkish law expert who had already begun gathering evidence from Turkish authorities and a mining engineer with experience relevant to the accident at the mine. In contrast, BMC only recently retained its Turkish law experts and was still working on securing a mining expert.
