Chris Angell, Principal, Mercer‘s Mercer Sentinel® Group, London
Chris will present a European investor view on securities litigation.
Chris is a Principal in Mercer’s Mercer Sentinel® Group and consults to European Pension Plans on all aspects of investment operations. Class action recoveries has become a hot topic for pension plans in recent years and the range of approaches taken has expanded over time.
Historically European Pension Plans generally ignored litigation and only participated in Class Action recoveries opportunistically when and if alerted by investment managers or their custodian. As a US phenomenon Class Actions were not seen as relevant by many Plans and there was little appreciation of the sums of money involved.
More recently the trend has been one of passive participation in recoveries but with an active search for opportunities. Reliance on custodian “best endeavours” has given way to selection of a service provider. Within Pension Plans Governance and Socially Responsible Investing (SRI) considerations are leading to the establishment of litigation and recovery policies and global opportunities are being pursued.
Going forward will we see significant growth in active participation? Enron, Parmalat and Shell have raised awareness – its clearly no longer “just obscure US companies” involved – and attacks on financial institutions globally can be expected to whet the appetite further. The activities of US law firms looking for plaintiffs (and fees) have had mixed impacts and the different approaches to litigation, in place or planned, in different jurisdictions complicate the picture.
Pension Plans have a fiduciary duty to fulfil and failing to collect monies due to a Plan could be seen as a breach of that duty. However its net returns that count and Trustees need to understand costs as well as potential recoveries. Litigation outside the US Class Action system is much more of a lottery and Trustees remain wary of active participation.