Although the US is still the most developed and dominant centre for securities class actions, recent years have seen the global securities class actions market expand rapidly. Following the Morrison v National Australia Bank case in 2010, the US Supreme Court effectively wiped out the eligibility of f-cubed actions from taking place within the US.
Although the US is still the most developed and dominant centre for securities class actions, recent years have seen the global securities class actions market expand rapidly. Following the Morrison v National Australia Bank case in 2010, the US Supreme Court effectively wiped out the eligibility of f-cubed actions from taking place within the US.
This set precedence for a non-US shareholder, suing a non-US company, whose stock was purchased on a non-US exchange, not being able to bring their case in the US courts. Since this ruling, jurisdictions across the world have been developing legislation in response to the need for securities class actions to be processed in alternative locations to the US.
Class action growth outside of the US is now increasing rapidly, with Goal Group predicting that this growth will reach $8.3 billion annually by 2020. While some legislatures already have more robust securities litigation frameworks in place than others, recent developments across different regions reinforce the need for global firms to monitor potential litigation areas worldwide.
The globalisation of class action legislatures have led to the emergence of Canada and Australia establishing themselves as dominating centres. Within Europe, the Netherlands, Sweden and Germany are asserting themselves as developed homes for securities class action cases, setting the benchmark for further European growth.
Spain, on the other hand, is yet to fully develop legislation that will benefit those wishing to take part in securities or environmental class actions. Since 2001, however, the country has had laws in place that enable consumers to participate in class actions to recover damages where a number of individuals have all suffered loss due to the same event. With the securities class action market expansion, it is still important to remember that Spain could be expected to extend this litigation to cover securities class actions in the future.
While awaiting this extension, it is vital that Spanish investors remain vigilant about their ability to participate in class actions in other jurisdictions. With Spanish investors now investing $118 billion in foreign equity shares, up from $100 billion in 2011, it is clear that there is a duty to monitor and participate in securities class action and collective redress opportunities in various countries around the world.
Investment in the US in 2012 from Spanish investors was $8 billion, $14 billion in France and $35 billion in Luxembourg. Goal Group’s analysis of its class action knowledge base predicts that $2.02 billion of global investors’ rightful returns will be left unclaimed each year by non-participation. These figures clearly show that non-participation is still very much an issue, meaning that shareholders and fiduciaries should always be monitoring and participating in class actions opportunities, where available.
The process of monitoring and participating has also become much less complicated in recent years due to the availability of specialist services that automate the process of class action involvement. These services are able to globally cover securities class actions in all markets and can substantially decrease the pressure placed on fiduciaries, as well as minimising the complexity and cost of recovery.
As securities class action, group and collective litigation mechanisms globalise, investors and trustees must remain vigilant and always monitor global class action participation prospects. Although securities class actions are not yet fully established in Spain, Spanish investors and fiduciaries are no exception to this. It is important for them, now more than ever, to grasp all opportunities available to participate in relevant securities class actions, both in Europe and elsewhere around the world.
