REMEDIES AND DAMAGES IN SECURITIES LITIGATION
CD: How would you summarise recent trends and developments to have emerged in securities litigation?
Davies: Securities litigation is well established in the US, where the claimant industry has developed over the past few decades in order to bring claims against listed entities. In recent years we have seen an increase in securities claims being brought in the UK and in other jurisdictions, mainly in response to corporate issues such as the Tesco accounting misstatement and the Volkswagen emissions scandal. The availability of third-party litigation funding and ‘after the event’ insurance in the UK mean that it is becoming increasingly attractive to bring securities claims in this jurisdiction, as it allows a class of investors to bring a claim without having to contribute to the costs.
Radcliffe: The nature of the issues that can give rise to claims depends on the unique factors and drivers that can impact on a business’s behaviour. The retail sector, for example, had for a long time relied upon commercial income and supplier rebates to bolster profitability; the automotive sector has had to comply with increasingly stringent environmental regulation. In the current market environment, there is an increasing volume of environmental, social and governance (ESG) concerns which could lead to the next big corporate scandal. Matters such as modern-day slavery in the supply chain and regulators’ increasing focus on facilitation of money laundering by financial institutions are only likely to increase the number of potential avenues under which claims might be pursued.
Jul-Sep 2021 issue
Grant Thornton UK LLP