Pensions funds urged to sue to stem losses
October 9 2009, 1:02 pmUK local authority pension funds have lost a projected £31bn on their investments between 2007 and 2009 but significant sums could recovered through the courts, legal experts have said.
The GOAL group of companies says £500m is forecast to be recovered by UK funds through so-called class action law suits, mainly in the US, where claimants club together to recover money from institutions who have acted unlawfully.
But if participation rates in the specialised law suits do not improve, around £125m of recoverable funds could be left on the table.
A GOAL statement said: “This is a wake-up call to the UK public sector pension funds that are currently missing out on their legal right to claim damages through the US courts.”
With the onset of the financial markets crisis – the collapse of the sub-prime mortgage market and the emergence of fraudulent Ponzi schemes – the number of local authority pension funds participating in class actions has risen significantly, the group said. However, a proportion of pension funds are still not involved.
West Midlands Pension Fund is one local authority scheme that continues to play an active role in class actions.
Senior investment manager, 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. We have recovered over $700,000 to date.”
Source: James Illman, Local Government Chronicle | Published: 08 October 2009
