According to Sundeep Tucker of the Financial Times, a recent study by the Goal Group, a UK-based “class action services specialist,” found that Asian institutional investors were not taking advantage of settlement funds available in U.S. securities class action settlements. The article points to a cultural aversion to “corporate confrontation” and perceptions about the complexity of the claims process as reasons why Asian investors have chosen not to participate.
Tucker quotes Steven Everard, managing director of Goal, as saying that an institutional investor has a “clear duty” to seek class action proceeds on behalf of its clients, suggesting that the failure to make a claim in a U.S. securities class action settlement could expose an Asian institutional investor to liability itself.
Especially with class action procedures expanding overseas, the prospect of fiduciary liability for an institutional investor raises the possibility, at least conceptually, of “nested” class actions, where a party is sued in a class action for breach of fiduciary duty for failing to make a claim for benefits in another class action. (“Nested” class actions is not a term of art as far as I know. In fact, I just made it up, but I expect credit if it catches on!). I have not heard of such a thing happening, but it’s probably only a matter of time…
This has already happened. I called it “Litigation about Litigation” on my old blog but same idea:
http://slw.riskmetrics.com/2005/08/litigation_about_litigation.html
http://slw.riskmetrics.com/2005/01/file_those_claims_or_else.html
Best,
Bruce
[...] ClassActionBlawg entry, I commented about the possibility of “nested” class actions, or class [...]
Bruce is being modest.
Before his review of the issue in the blog post of 25 January 2005 (link above), he had actually spotted it one week earlier [here: http://slw.riskmetrics.com/2005/01/class_actions_filed_against_mu.html%5D and has followed the story since [see, here: http://slw.riskmetrics.com/2006/06/litigation_about_litigation_pa.html%5D.
Perhaps then now is a good time for someone to produce an updated list of the collected ‘pile’ of cases.
Is the report by the Goal Group available online?
Matt, I couldn’t find it on their website, but I sent an inquiry to find out. I’ll post any information I get in response here.
Paul, I sent an inquiry to the Goal Group requesting a copy of the report itself, but I never received a response. I was wondering if you were able to obtain it, and if so, whether you might provide a copy.