Canada's top court allows Quebec class action against Desjardins Financial Services

OTTAWA (Reuters) - Canada’s Supreme Court on Friday ruled that a class action suit dating back to the fallout from the 2008 financial crisis and brought against Desjardins Financial Services can proceed, confirming Quebec’s broad criteria for class action suits.

Ronald Asselin brought a class action lawsuit in 2009 against Desjardins Financial Services Firm Inc after he was informed he would receive no return on a capital investment he made with the firm in the wake of the 2008 crisis.

In the first ruling in the case, Asselin’s class action was not allowed. But the Quebec appeals court overturned that decision. On Wednesday, the Supreme Court confirmed the appeals court ruling and said the class action can go ahead, though it did limit the scope of damages being sought.

Asselin alleges that the firm failed to disclose the risks tied to the securities.

The class action suit against both the firm and its management seeks C$1,000 in punitive damages for each member of the suit and alleges the company designed and managed the investments in a reckless and incompetent manner, and used inappropriate financial strategies.

Desjardins did not immediately respond to a request for comment.

In Canada, the rules guiding the class action certification process are usually set by the province. Friday’s decision confirms that there is a fairly low bar for class action authorization in Quebec.

Reporting by Steve Scherer; editing by Jonathan Oatis