Case Filings Remain Steady Through 2012, Litigation Time Lengthens

FRT Admin
Site administrator
December 21, 2012

The number of securities class action cases that were filed in the court system throughout 2012, including projected cases, is on par to match the five-year average, according to NERA Economic Consulting’s “Flash Update: 2012 Trends in Securities Class Actions”. 195 cases were filed in 2012 by the end of November, a pace that would put total for the year at 213. As the impact of the credit crisis wanes, it is not surprising that the number of crisis-related cases filed has dramatically decreased from a high of 103 in 2008, to 4 at the time when NERA’s update was published. In contrast, the number of cases related to the merger objections remained steady, helping to make up for the dip in credit-crisis lawsuits.

NERA 2012 Trend SnapshotWhile the number of settled cases was significantly lower in 2012, instances of dismissed cases were much lower than average. The decrease in settled cases is a possible product of the litigation environment, or a pending Supreme Court decision dealing with the requirements of a class action surrounding the company Amgen. This decrease in settlements indicates a longer case resolution time. With fewer cases being dismissed and longer periods before settlements, it seems that 2013 could see an increase in settlements as compared to 2012.

It is true that the number of case settlements is lower than the historical average, but settlement values continue along with the five-year average. And excluding massive settlements of over $1 billion, this year’s average of $36 million actually surpasses the $32 million average for 2005-2011. We at Financial Recovery Technologies look forward to the release of a more comprehensive industry trend analysis which is likely to be released early in 2013.

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