Lawyers slam class actions being pulled from finance bill
April 14 2010, 3:48 pm
Legal firm Goal Group said the government’s decision to drop class action mechanism for disputes with financial services firms from new legislation was “disappointing”.
Stephen Everard, managing director at Goal Group, said there was a need for class actions to be included in the bill.
He said: “The main goals of the class actions mechanism are generally viewed as improving corporate governance and strengthening shareholder rights – in other words, encouraging corporate management to behave honestly and responsibly and providing a means of redress if this does not happen.
“A number of European investors – including those in the UK – currently have no right to redress – no efficient way to bring a joint lawsuit despite having suffered fraudulent or irresponsible corporate behaviour.”
Mr Everard said the need for an efficient reclamation system had been highlighted by a recent report from the Civil Justice Council – which advises the Lord Chancellor.
He added: “It is true that any amends merit detailed thought and a concise explanation of how the provisions would work – but not to the point of atrophy.
“There are several successful and fair class action models around the globe adopted by legislatures other than the US such as in Australia, Canada and the Netherlands on which this could be based.”
