Archive for the ‘Wrap it up!’ Category

Securities class action trends 2008

Saturday, December 20th, 2008

This week two reports were published, by NERA Economic Consulting and RiskMetrics Group, both covering securities class action litigation trends of the past year. NERA’s 2008 Trends in Securities Class Actions (report, press release) is its annual year-end study of US case filings and settlements. Securities Docket has a short overview of the report’s findings and additional details on the study from the two primary authors.

RiskMetrics’ Globalization in Securities Class Actions (registration required), authored by Adam T. Savett also of Securities Litigation Watch, is an update to last year’s paper Accountability Goes Global. It ‘explores recent trends in non-US investor interest in US Securities Class Actions.’ For instance, it finds that from 1996 through 2007 there were ‘234 different instances of an international [non-US] institutional investor seeking to serve as a lead plaintiff in a US securities class action’, in 134 different cases. And that ‘[i]n every year since 2002, international institutional investors have filed lead plaintiff motions in more than 5% of all new federal securities class actions.’

One thing you, regular WV&Z readers, are surely familiar with is the report’s latest reason explaining ‘the continued trend’ of non-US investor interest in US securities class actions: ‘The increasing availability and acceptance of securities litigation in non-US jurisdictions.’

Wrapping it up, 26 November 2008

Wednesday, November 26th, 2008

One event for in the diary, notes on one that has taken place and updated links here on WV&Z:

Grant & Eisenhofer PA’s 8th Global Shareholder Activism Conference (details, programme) takes place in New York from 4-6 December. (The 9th is in London, 23-24 April 2009.) Alexander Reus of Diaz Reus LLP and Andree Nesselrodt of DekaBank Deutsche Girozentrale, a Diaz Reus client, are on the panel of the luncheon breakout session IV-C Class Action Settlements on the Friday. Unrelated to the event, both Reus and Nesselrodt (a Vice President and Senior Legal Counsel with DekaBank) are quoted in the Financial Times Deutschland (in German) earlier this year, as are Geoffrey C. Jarvis of G&E and Winheller Rechtsanwälte’s Stefan Winheller, on the role German investors may play in US class actions. has published notes on the 12th Annual National Institute on Class Actions conference (previous post), including on the “Class Actions Sans Frontières” presentation.

NERA Economic Consulting’s new topic specific website Securities Litigation Trends has been added to the Resources links section (right column). It has NERA’s reports on SEC settlement trends and shareholder class action trends, settlement documents and a weekly securities blog digest among other things all in one place. In the past few weeks a number of plaintiffs’ firms has changed firm names and domain names accordingly. These have been amended in the Firms / US / Plaintiffs links section (right column).

My friends at Tilburg University have recently launched the Tilburg Institute of Comparative and Transnational Law (TICOM). The Institute “aims to be a leading institute for scholarly research into law as an international phenomenon… [It] questions the relevance of territorial and dogmatic borders delineating both national jurisdictions and the classical areas of law.” (original emphasis) Their link has been added to Resources as well. WV&Z wishes TICOM and all involved all the best.

Wrapping it up, 19 April 2008

Saturday, April 19th, 2008

Three items of note this time, one bulletin, two articles.

Lovells LLP’s class action practice has published its latest bulletin (April 2008). Several members of the practice contribute to it, a number writing about the respective European and US jurisdictions in which they practice. Contributions cover the latest developments in France and the possibility of its adoption of a group litigation procedure, the scope of Germany’s KapMuG and the European Commission and ‘collective redress’.

The first article is entitled Aggregate Litigation across the Atlantic and the Future of American Exceptionalism, by Prof Richard A. Nagareda, lecturer at Vanderbilt University School of Law. (With thanks to the Drug and Device Law blog.) From the abstract:

This article analyzes the emerging phenomenon of trans-Atlantic civil litigation on an aggregate basis - chiefly, though not exclusively, by way of class actions. European systems have shown a growing receptiveness for aggregate litigation, but treatments of this development have consisted largely of description. This article offers an analytical framework with which to anticipate the structural dynamics of transnational aggregate litigation in the twenty-first century.

For a quick reference of recent ‘developments in aggragate litigation’ in Europe, see the table from page 19 (20 of 47).

In the second article, in the The Times newspaper, Edwin Coe LLP’s David Greene politely warns ‘Hands off our claimants, please’. ‘Is there a head of steam building up to introduce US-style class action to Britain? Consumers will not be so lucky.’ Greene, partner and head of litigation, discusses among other things the export of cases by way of the US plaintiffs’ bar’s efforts ‘recruiting claimants in the UK’ and the corresponding growth of UK claimants’ participation in US actions. (In WV&Z’s view, ‘participation’ is moving to be and, once appointed, acting as lead plaintiff and not the just filling out and filing of a settlement claim form.) Cited cases include Vivendi, GSK and the English case MAN v Freightliner (opinion). He then goes on to discuss the flipside, the barriers of the development of ‘US-style class actions’ over here - ‘loser pays’, lack of contingency fees and ’simply the state of the law’.

Edwin Coe is the firm that represents 6,000 - the number is growing - private shareholders in the nationalised mortgage lender Northern Rock Plc. (Also see this article.) WV&Z waits with bated breath for that case to commence.

Wrapping it up, 7 April 2008

Monday, April 7th, 2008

John M. Gray holds several functions at public services union UNISON and is a pension representative at the Local Government Pension Scheme (LGPS). In addition, he keeps John’s Labour blog, on political and trade union issues. Bearing that in mind, to read his account of a Trades Union Congress seminar on class actions and plaintiffs’ lawyers in the UK see his post Class Action at the TUC.

Also of interest, an article by Barlow Lyde & Gilbert LLP (first published in The Banker) elaborating on the UK claimant situation following the ‘credit crunch’ after a brief comparison with the US.

And one off the shelf is a January article in The Lawyer, on Proskauer Rose LLP’s 2008 Trends and Developments report. (press release) One of the trends in the report is ‘[t]he continued (albeit lamented) “Americanization” of non-US legal systems’ (from page 11). (Subscribe to WV&Z.)

Wrapping it up, 26 November 2007

Monday, November 26th, 2007

Two articles of interest of today, in FTfm, the weekly Financial Times fund management insert, and this week’s The Lawyer.

The Lawyer reports that Coughlin Stoia Geller Rudman & Robbins LLP, which currently counts 30 UK pension funds among its clients, aims to treble this number over the next 12 months. (Note, no word on a UK office or striking up alliances, just the intent on acquiring more clients.) It mentions the case against GlaxoSmithKline, in which Coughlin client Avon was appointed lead plaintiff (see last previous post on the case).

It was of course already apparent here that Coughlin was active as counsel to UK pension funds. More recently, Coughlin client Lothian fronted the complaint against Vodafone (previous post) and late last year London Pension Fund Authority joined a US client of the firm in the derivative action against BP (first previous post of several on that case, which since has been dismissed; the opinion will be discussed in a future post).

The FTfm article discusses the use of the US class action by European investors. It quotes, among others, RiskMetrics Group’s Adam Savett (of Securities Litigation Watch), René Maatman of Dutch pension fund ABP and Association of British Insurers‘ Michael McKersie. A quote:

“US judges seem prone to assume superiority on the uncertain presumption that EU courts will recognise US class action judgments or settlements,” says [Allen & Overy LLP’s Tim] House, who doubts that they will.

Wrapping it up, 20 June 2007

Wednesday, June 20th, 2007

What follows here is a wrap up of a few recent articles and posts, including on the UK Companies Act 2006, the ‘f-cubed’ class and national Enrons.

Alan Karter of Simmons & Simmons comments in the FT’s blog Alphaville on the Companies Act 2006 and the statutory directors duties and derivative action:

The worry is that the new shareholder derivative action is so clear that people are bound to want to take advantage of it. There’s a huge temptation to use the stick because it’s there and because it’s new. It remains to be seen whether this combination (of statutory general duties of directors and shareholder derivative action) will be used […] Most business people regard litigation as a tool of last resort in the UK. It will be interesting to see if litigation around these issues starts to be used in the UK as a tool more in the American style.

Edwin Coe LLP seems to be clearer and more decisive on what effect the Act, which comes into force in October this year, will have on directors duties and derivative actions in particular:

The Act undoubtedly heralds significant changes but these changes do not in any way match shareholders’ rights in the US and it is highly unlikely that we will see any substantial growth in shareholder litigation as a result of the new provisions. (source)

WV&Z agrees with Edwin Coe on this point. Some things change and some things don’t. It’s the things that don’t - the ‘loser pays’ principle is one, the lack of availability of the contingency fee arrangement is another - that make it all in the end remain the same as it was. (Also see this previous post.)

Two interesting articles on foreigners in the US, by John C. Coffee Jr and Quinn Emanuel Urquhart Oliver & Hedges LLP, entitled ‘Foreign Issuers Fear Global Class Actions’ and ‘Foreign Plaintiffs and Class Members in U.S. Class Actions’ respectively.

Two notes on the Coffee article: he refers to a ’series of recent reports’ on capital markets competitiveness, one of which is by the (not therein expressly named) so-called Paulson Committee: Prof Coffee served as a consultant to the committee; Prof Coffee was retained by Royal Dutch Shell Plc to provide “the court with a brief memorandum outlining the extraterritorial reach of the United States’s federal securities laws” (but not to “address the merits of the dispute between the parties in the U.S. litigation”). (declaration, an annex to the court petition) In re Royal Dutch/Shell Transport Sec. Litig. and the Shell Settlement is one of the examples given.

Schiffrin Barroway Topaz & Kessler LLP has struck up its third alliance, with Isreali firm Man-Barak Advocates & Solicitors (press release, and see SLW) which already had an alliance with City firm McFaddens LLP, and it welcomes economist Peter Kraneveld in an advisory role, as does State Street Global Advisors. (source)

And finally, each country its own Enron, via Best in Class (and Lies Damn Lies).

What when where: Legal Week’s Litigation Forum 2007 takes place in London on 19 September. The two panel sessions of most interest here are ‘Class action: friend or foe?’ which pits Cohen Milstein Hausfeld & Toll PLLC’s Rob Murray of the firm’s London office against, among others, Andrew L. Sandler of Skadden Arps Slate Meagher & Flom LLP, and ‘Litigation funding models’ which includes representatives from IM Litigation Funding and NERA Economic Consulting. (programme and registration form)

Wrapping it up, 29 May 2007

Tuesday, May 29th, 2007

It has taken six years and several settlements of US civil lawsuits for the criminal trial to commence in Belgium since the bankruptcy of Lernout & Hauspie Speech Products NV. (Wall Street Journal, subscription required; Belgian paper De Standaard’s expansive L&H file, in Flemish) Dexia and KPMG, both of whom have settled the civil litigation, are defendants in this trial, as well as a dozen company officials and a number of outsiders.

It’s important to note that, under Belgian law, civil suits can only commence after the conclusion of criminal suits. This one is expected to take years, so the non-US individual shareholders so far excluded from relief will have to wait far longer than their US counterparts for an outcome.

A collection of other noteworthy articles of the past few weeks in no particular order:

And one more that anyone, especially of the plaintiffs or defense bar alike, is invited to comment on here or there: The Times‘ Don’t sue fellow shareholders, by columnist Graham Searjeant. What he says:

Apart from pitching hedge and pension funds against small investors, it [’uninsurable class actions from shareholders’] undermines the legitimacy of companies trying to maximise shareholder value.

What’s more: Schiffrin Barroway Topaz & Kessler LLP acted as Counsel in the Shell and Tyco actions (for the Opt-Out Plaintiffs and as Co-Lead Class Counsel, respectively), both of which are being referred to in the The Times article. Darren J. Check, a partner with the firm, has submitted the following comment in response to the article:

[S]uch generalized statements that lawsuits and settlements are unfair are merely attacks on the plaintiffs bar with little substance to back the claims. While it is true that many of the current shareholders of companies like Tyco and Royal Dutch Shell may not have been shareholders during the time of the alleged fraud, there is a responsibility for companies to clean up the messes they have made and to do their best to compensate those investors that did suffer losses.

In addition, these op-ed pieces often ignore the corporate governance changes achieved in many class action settlements and the deterence factor implicit in these settlements. Lastly, on fees, I would simply emphasize again that plaintiff’s attorneys bear a great deal of risk in these actions and the fees that they collect are much more like the 10% you saw in Shell and not the often publicized 33%-40%. The bottom line is that there is a role for litigation when it comes to investors, under the right circumstances.

Wrapping it up, 11 May 2007

Friday, May 11th, 2007

Legal Week and The Times last week reported on the latest development in the running story of plaintiff’s firm Cohen Milstein Hausfeld & Toll PLLC’s establishment of a London office, naming the two competition lawyers who will ’spearhead [the firm’s] European push’.

Legal Week this week reports of the reaction by the defense bar: Skadden Arps Slate Meagher & Flom (UK) LLP is the first to launch a class action defence practice in the UK. In the latter two articles a number of legal practitioners is quoted on these moves.

Also worth a read are an article in the Financial Times (Risk Management section, subscription required) on derivative actions and the extraterritorial reach of US law in relation to D&O insurance in Europe and an opinion piece in the Wall Street Journal (subscription required) which discusses ABN Amro’s current quagmire in the context of the ‘Dutch discount’ and the ‘polder model’.

What’s more: prompted by Best in Class, with thanks, to update this post, the Blog of Legal Times has a follow up to the Skadden story. Asked for comment, Andrew L. Sandler, the Skadden partner mentioned in the original Legal Week article and quoted by BLT, confirms with WV&Z that “there is no new practice group and I am not going to London.”

Wrapping it up, 6 April 2007

Friday, April 6th, 2007

The Financial Times and Legal Week yesterday published five interesting articles altogether, all relating to capital markets competitiveness. Two of the three FT ones deal with the Financial Services Authority and the ‘light touch’ regulatory regime (here and here), the third (here) is based on an interview with Sullivan & Cromwell LLP Chairman H. Rodgin Cohen; the ten-minute interview itself is available online (here, with full transcript).

The (WV&Z edited) answer to the question whether Cohen ‘is concerned that New York is losing its place as the premier global financial centre’:

I am concerned. It still is the premier centre but if you look at the enormous strides that London has made and you look at the two lines, if you extend them out, sooner or later they are likely to cross… [T]here are problems with New York which deal, largely, more with the litigation atmosphere than even the legislative atmosphere that ultimately do threaten and you could reach a tipping point.

The first Legal Week article (here) reports on New York lawyers calling for further changes to follow the SEC’s rule change regarding de-listing; the second (here) discusses ‘recent developments [that] have brought class actions a step closer to Europe’.

And finally, two more articles of last month, in The Times and The Lawyer, on US class actions ’still [being] a bigger threat to British business’ and on UK pension funds’ Time Warner Inc. (NYSE: TWX) opt-out action success. Cohen Milstein Hausfeld & Toll PLLC is the focus of criticism in the former - note, this is two days after the same paper labelled partner Michael Hausfeld a ’star’ and ‘litigation supremo’ (see previous post) - and in the latter, Lerach Coughlin Stoia Geller Rudman & Robbins LLP is the subject as counsel to the pension funds.

London-based Allen & Overy LLP partner Peter Watson quoted in The Times:

Companies should be wary of the long arm of the US law reaching into foreign boardrooms and hauling British companies - or individual executives - before American courts… US courts tend to take the view that if foreign companies come to the US to enjoy the benefits it has to offer, then they should also accept the costs of doing business there which means answering to the American legal system where appropriate.

What’s more: The author of the The Times article, a journalist with the paper’s Law section, responded to this post. In his e-mail he offers a clarification - “Although owned by the same group, the Sunday Times and Times are not the same paper from an editorial point of view” - and the following statement:

I don’t believe CMHT is the “focus of criticism” in the story I did. I simply mention their arrival in London as part of a broader movement towards more US-style litigation in Europe.

Wrapping it up, 27 March

Tuesday, March 27th, 2007

The following articles have appeared in the past few days or so:

  • Financial Times (FTfm section), a continuance of the debate on class actions in Europe and European plaintiffs in the US
  • LegalWeek on the influence of the Sarbanes-Oxley Act on UK legislation
  • Pensions Week (via Securities Litigation Watch), Grant & Eisenhofer PA’s response to reports on capital markets competitiveness and other critics of the current US securities litigation system

A quote from the latter:

We share [Association of British Insurer’s] Peter Montagnon’s desire to see the U.S. initiate a system of corporate governance that makes corporate executives truly accountable to shareholders. However, vested business interests in the U.S. have successfully fought off every attempt to achieve our shared goal. Against that backdrop, we would welcome his support for the corporate governance changes that are being won through shareholder litigation.