Class action failure could cost local government schemes £125m
October 9 2009, 2:53 pmUK/US – Local authority pension schemes could be losing out on £125m (US$198.9m) by failing to participate in US class action lawsuits, research by Goal Group revealed.
Goal Group managing director Stephen Everard claimed £500m of local government scheme losses between 2007 and 2009 would be recovered by funds participating in class action lawsuits.
But he said between 25% and 30% of local authority schemes were not participating in these actions – meaning £125m of the recovered money could be left unclaimed.
He said: “There’s a recognition that something needs to be done…but there’re always other priorities. It’s also viewed as very complicated, when in fact it isn’t.”
Everard said participation has “increased marginally” since Goal Group began its research two years ago.
The West Midlands Pension Fund has been an active participant in class action suits and has already recovered $700,000 (£439,000).
WMPF senior investment manager for equities and corporate governance said Tony Doyle said: “We have been involved in numerous class actions over the years, varying in size, including A.T. & T. Wireless, Cable & Wireless, Federal Home Loan and Royal Ahold NV.
“The fund has always supported good governance challenging companies that do not meet best practice. We perceive poor governance as a risk to a fund’s long-term financial interests. The fund therefore submits class actions globally where it believes that it has suffered a financial loss through fraudulent or irresponsible corporate behaviour.”
Source: Raquel Pichardo-Allison, Global Pensions | Published: 09 October 2009
