By William E. McNally and Barbara E. Cotton

Section 203 of the Securities Act, R.S.A. 2000, c. S-4 provides a civil remedy for misrepresentation in a prospectus but does not prescribe how damages are to be measured for breach of its provisions. Certain rules are prescribed, however. An underwriter is not to be liable for more than the total public offering price represented by the portion of the distribution underwritten by him. The defendants are not to be liable for all or any portion of the damages that they prove do not represent the depreciation in value of the security as a result of the misrepresentation relied upon. The amount recoverable is not to exceed the price at which the securities were offered to the public. Beyond these statutory rules, a thesis must be constructed as to the general principles governing the measurement of damages. The need for a thesis becomes particularly acute within the context of a representative plaintiff proceeding /class action context.

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