CD: Could you provide a brief overview of common fund-related disputes? What, in your opinion, are the underlying causes of the recent uptick in such disputes?

 Barclay: The common factor in most fund-related disputes is a mismatch between investor expectations and actual investment performance. This may, or may not, be a result of initial misselling, subsequent negligent asset management or fund administration, or even negligence on the part of external service providers such as auditors. Claims of fraudulent behaviour have a higher public profile, but occur less frequently in practice, and where an insolvency intervenes there is likely to be a battle among investors as to priorities. The recent uptick in fund litigation is unsurprising, because fund disputes tend to have a relatively protracted gestation period before court proceedings are formally launched. Many jurisdictions, including Guernsey, apply something like a six-year limitation period to most of the claims which commonly arise in fund disputes. Therefore, a lot of potential litigation which has been bubbling under since the early stages of the financial crisis is now being formalised before it becomes potentially time-barred. This gestation period has been coupled with an upturn in the market, not to mention the development of litigation funding giving rise to the financial means to pursue claims.

Jan-Mar 2014 issue

Bedell Cristin Guernsey Partnership

Grant Thornton UK LLP, London

Campbells, Cayman Islands

Kinetic Partners LLP