Driven largely by several mega-settlements (that is, settlements of $100 million or greater), the aggregate value of global securities class action settlements in 2020 totaled 61% more than in 2019, according to a new report. The report, entitled “2020 Securities Related Settlements Exceed $5.8 Billion,” and published in a January 18, 2021 post on the Harvard Law School Forum on Corporate Governance, was written by Jeff Lubitz of ISS Securities Class Action Services. The report can be found here.
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global litigation trends
A “Snapshot” of the Global Rise of Collective Investor Actions
As I have noted in prior posts (most recently here), one of the more interesting and noteworthy developments in recent years has been the rise of collective investor actions outside the United States. A recent white paper published by Allianz Global Corporate & Specialty SE in collaboration with the Clyde & Co law firm entitled “Collective Actions and Litigation Funding and the Impact on Securities Claims: A Global Snapshot” takes a detailed look at the spread and development of collective investor actions – including, in at least some jurisdictions, securities class actions – against corporations and their directors and officers and the interrelation between this development and litigation funding. The report also includes a detailed picture of the status of collective actions and litigation funding in 28 different countries. The white paper can be found here.
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More About the Global Rise in Collective Investor Actions
One of the most interesting and significant developments in the corporate and securities litigation arena has been the rise of collective investor litigation outside the United States, as I have discussed in prior posts. This rising tide of litigation has not only included increased numbers of legal actions in a number of different jurisdictions but also has included several substantial settlements, including among others the massive settlements in the Fortis case and in the RBS case. In an updated report July 2019 report entitled “Global Securities Litigation Trends: July 2019 Update” (here), the Dechert law firm takes a detailed look at the “sea change” that has taken place in collective investor litigation in recent years, as a result of which, according to the report, we have entered “a new era of global securities litigation.”
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Dutch Court OKs Petrobras Claim Jurisdiction Despite Brazilian Arbitration Clause
In a development with significant implications both for Petrobras investor claims and for the global pursuit of investor claims generally, a Dutch court has accepted jurisdiction for a securities fraud action filed in the Netherlands against Petrobras, and also ruled that the arbitration clause in Petrobras’s bylaws do not preclude the Dutch proceeding. As discussed below, the court’s rulings could have important global ramifications for the viability of Dutch procedures for investors seeking collective redress, even (as is the case in the Petrobras action) with respect to companies based outside of the Netherlands.
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As Litigation Funding Rises Globally, Important Local Differences Affect its Impact
As I have previously noted on this site, the rise of third-party litigation funding is one of the most significant and potentially consequential development in the global litigation arena. But because of differences in countries’ legal systems, the escalation of litigation funding means and will mean different things in different jurisdictions. In an interesting November 10, 2016 Law 360 article entitled “U.S. vs. The Rest: Litigation Funding’s Local Characteristics” (here, subscription required), Noah Wortman of the Goal Group of Companies and Jeremy Marshall of Bentham Europe Ltd. suggest that the rise of litigation funding has had and will continue to have important consequences in the litigation arena, but those consequences differ and will differ due to important differences in the litigation environment in the various countries. The authors’ comments include some interesting insights into litigation funders’ investment goals.
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Is Australia About to Become the Global Forum of Choice for Securities Class Action Litigation?
As I have noted in prior posts, in recent years, there has been a significant growth in shareholder class action litigation in Australia. There are a number of reasons for this development; among other things, Australia’s class action regime is, by comparison to the procedures available in many other jurisdictions, plaintiff-friendly. For these and other reasons, according to a recent law firm memo, Australia may be poised to become “the forum of choice for plaintiffs seeking redress in the world of securities class actions.” The June 27, 2016 memo, which is written by the Quinn Emanuel law firm and is entitled “Australia: An Increasingly Attractive Plaintiffs’ Forum for Securities Class Actions,” and raises a number of interesting questions, as discussed below, and can be found here.
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The Next Step in Litigation Financing?
In recent years, litigation financing has become an increasingly important –albeit controversial – part of the litigation landscape. The ongoing evolution of litigation financing now appears to have taken a significant next step, in the form of a formal, public partnership between the litigation funding firm and a plaintiffs’ law firm. On October 28, 2015, the litigation funding firm Burford Capital and the plaintiffs’ competition law firm Hausfield issued a joint press release (here) in which the two firms announced their entry into a €30 million agreement to fund claims in Germany and to allow the law firm to open a Berlin office.
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Corruption Allegations Lead to Securities Lawsuits
I was on a panel at a law firm event last week during which I was asked to make some predictions for 2015. Among other things, I said that I thought we would see an increase of securities class action lawsuit filings following in the wake of regulatory investigations, especially bribery investigations. I also said …
Many Companies’ Most Significant Regulatory Risks Are Not in Their Home Country
When Chinese regulators hit GlaxoSmithKline with a $489 million penalty last month – the largest corporate penalty ever in China – it set off alarm bells around the world. Among other things it sent out a “wake-up call for global companies that assumed that their main regulatory risk is in their home countries,” according to …
Thinking about the Criminalization of American Business
One trend in recent years that has been impossible for anyone following the business pages to miss has been the steadily increasing numbers of huge monetary settlements that companies have reached with U.S. regulators and prosecutors. These settlements often involve staggeringly large amounts of money, often funded by shareholders. The Bank of America’s recent $17 …