Laura Paglia on panel debating financial advisers' fiduciary responsibilities

Lawyers clash over imposing statutory fiduciary duties for financial advisers

April 04, 2010

A Law Times article on a conference panel discussion about regulatory and other issues concerning fiduciary responsibility included panel contributions from partner Laura Paglia. Below is an excerpt of the article.

Lawyers at the [conference] clashed over whether Canada needs to impose a statutory fiduciary standard for financial advisers.

Laura Paglia, a partner at Torys LLP specializing in securities litigation, said the core principles being debated in the U.S., which revolve around disclosure of conflicts of interest and putting the client’s interest first, were already generally accepted in Canada under the duty of care owed by all financial advisers to their clients.

“We have extensive case law enforcing that duty of care and if you breach that standard of care, an investor goes to court and can win in simple negligence. And they get restituted without ever making out a breach of fiduciary duty,” she said.

“We don’t need [the fiduciary standard] in Canadian law, because we never had the debate. It’s always been there through the case law, through regulation, and through industry standards.”

While investors do sue for a breach of fiduciary duty, Paglia said a tiny proportion of cases go to trial and even fewer make the claim stick, because the term implies a much higher standard of care than in other jurisdictions.

“It’s not bad, because it doesn’t mean they weren’t restituted. It means they were otherwise restituted without needing to go to the fiduciary standard,” she said.

For the full article, click here.

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