Buy, sell or hold: the duty to mitigate
In two recent cases,[1] the Court of Appeal for Ontario clarified the extent of an investor’s duty to mitigate when a stockbroker fails to follow instructions. As the breach relates to the purchase or sale of marketable securities, an investor must act quickly to mitigate any losses. The investor may decide to hold a security, but he does so at his own risk. After discovering a broker’s mistake, an investor must take reasonable steps to avoid or minimize losses (e.g., re-entering the market). He cannot recover compensation for losses that could reasonably have been prevented; but, as a necessary corollary, ... [more]
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