Non-U.S. securities class actions settlements predicted to rise to USD 8.3 billion/year by 2020

in Press Releases

GOAL Group report estimates 2020 securities class action market and forecasts over USD 2 billion will remain unreclaimed through non-participation

 

Wilmington, DE, May 2013 A new forecast study from GOAL Group, the leading global class action services specialist, predicts that settlements in securities class actions outside the U.S. will rise to USD 8.3 billion per year by 2020.  GOAL Group’s study also identifies that if non-participation rates seen in U.S. class actions are experienced in non-U.S. activity, by the end of the decade USD 2.02 billion of investors’ rightful returns will be left unreclaimed each year.

Furthermore, the report also warns that because non-U.S. legislatures require participants to register at the beginning of a case, investors need to participate now to receive their rightful returns.  Any level of non-participation presents fiduciaries, such as fund managers and custodians, with a potential legal risk.  Experience in the U.S., along with emerging contractual obligations, suggests that fiduciaries may be sued if they do not ensure investors participate in class actions to recoup a proportion of their investment losses.

This is is a wake-up call to fiduciaries, as growth in non-U.S. collective actions and evidence that some custodians are restricting the geography of their class action service level, indicate that non-participation rates are likely to be at least at current U.S. case levels, and probably considerably higherMoreover, evidence is emerging that funds are now including the responsibility for class action identification and participation in contractual agreements with their custodians.


Stephen Everard, CEO, GOAL Group, comments, “Until recently, the main focus of securities class actions was on the U.S. as the most developed legislature in this respect.  However, class action growth outside the U.S. is now increasing rapidly, and is predicted to mirror the growth of the U.S. 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 U.S. Federal courts, along with a growing desire to develop domestic class action procedures in many countries around the globe.  Moreover, certain legislatures – currently The Netherlands and Canada – have defined and admitted the idea of a global ‘class’ where non-U.S. investors in shares listed on a non-U.S. 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.”

Methodology

Predicted annual settlement volumes for non-U.S. legislatures have been modelled through to a forward date of 2020, the end of the decade.  Using GOAL’s proprietary data and insights, combined with corroborative third party sources, the model utilises the U.S. class actions experience to estimate the size of annual settlements in other world markets after a further eight years of class actions development in these countries and in legislatures that accept international plaintiff representation and reparation.  GOAL’s predictive model adopts a conservative positioning, factoring out the major peaks of settlement values seen in the U.S. experience to date.

 

Ends

Please contact Lindsell Marketing (below) for a copy of the full GOAL report entitled “Recovery Responsibility”.

Press Contacts

Laura Blott, Lindsell Marketing

(t) +44 (0)20 7402 0510, (e) laura@lindsellmarketing.com

 

 

About GOAL Group Limited (GOAL)

Established in 1989, GOAL is the leading class actions and tax reclamation services specialist.  Goal has a truly blue-chip client base including many of the world’s largest global custodians, asset managers, private banks, pension funds, hedge funds, high net-worth individuals, investment banks, prime brokers and fund managers spread widely across Europe, the United States and the Far East. 

 

GOAL’s class actions service is provided via the wholly-owned subsidiary Goal Global Recoveries Limited (“GGRL”) and supports individuals and corporate entities who have suffered financial loss from owning shares in a company where there has been mis-management and/or unlawful behaviour.  GOAL has calculated that between 2000 and 2007, nearly $12 billion had been ‘left on the table’ by shareholders who had failed to seek redress for their losses, and is currently working on an estimate of unreclaimed losses for 2008-11.

 

In the tax reclamation field, GOAL’s flagship product GTRS (Global Tax Reclamation System) – available as installed software or as an outsourced service – helps custodians reclaim tax on income from cross-border securities that has been overwithheld by foreign governments based on international Double Taxation treaties. This is delivered to global financial institutions, including 5 of the world’s top 10 custodian banks.

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