Custodians are at great legal risk, warns GOAL Group
23 January 2013 London
Image: Shutterstock
A new forecast study from GOAL Group, a global class action services specialist, predicts that settlements in securities class actions outside of the US will rise to $8.3 billion per year by 2020.
The report also warns that because non-US legislatures require participants to register at the beginning of a case, investors need to participate immediately to receive their rightful returns, and any level of non-participation presents fiduciaries such as fund managers and custodians with a potential legal risk.
Stephen Everard, CEO of GOAL Group said: “Class action growth outside the US is now increasing rapidly, and is predicted to mirror the growth of the US class action scene in the early part of the 21st century. The root of this international diversification seems to have been a combination of restrictions on jurisdiction definitions in the US Federal courts, along with a growing desire to develop domestic class action procedures in many countries around the globe.”
“Certain legislatures—currently the Netherlands and Canada—have defined and admitted the idea of a global ‘class’ where non-US investors in shares listed on a non-US exchange can pursue their securities class actions in those countries’ courts. There is no viable excuse for non-participation as a number of specialist service providers can now perform this function at relatively low cost.”
The report also warns that because non-US legislatures require participants to register at the beginning of a case, investors need to participate immediately to receive their rightful returns, and any level of non-participation presents fiduciaries such as fund managers and custodians with a potential legal risk.
Stephen Everard, CEO of GOAL Group said: “Class action growth outside the US is now increasing rapidly, and is predicted to mirror the growth of the US class action scene in the early part of the 21st century. The root of this international diversification seems to have been a combination of restrictions on jurisdiction definitions in the US Federal courts, along with a growing desire to develop domestic class action procedures in many countries around the globe.”
“Certain legislatures—currently the Netherlands and Canada—have defined and admitted the idea of a global ‘class’ where non-US investors in shares listed on a non-US exchange can pursue their securities class actions in those countries’ courts. There is no viable excuse for non-participation as a number of specialist service providers can now perform this function at relatively low cost.”
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