Financial Recovery Technologies Fast Five provides you with the top news in shareholder class actions. Stay up-to-date on the latest developments in settled (U.S./Canada) claims filing opportunities, Antitrust settlements, Global Group Litigation matters and more. For more information, contact your Financial Recovery Technologies representative or email us.

1. A Fundamental Shift? the High Court’s Decision in BMW Australia Ltd V Brewster

A new decision may result in a slowdown in the commencement of new class actions and a return to ‘closed’ class actions. This decision is a significant blow to litigation funders in existing and future class actions. Litigation funders are now brought back to the situation pre-Money Max, in that they will be required to assess the economics of any new class action before it is filed, rather than perhaps commencing early in reliance on a CFO to establish their returns. This may involve the process of signing up individual group members through a bookbuild process, which litigation funders argued was time-consuming and expensive, but which was the norm historically. The High Court had no sympathy for this argument, noting that in most cases, the size of the potential return to the litigation funder from funded group members was still not insignificant. Click here to read the full article.

2. Three Game Changers in 10 Days in the Australian Class Action Space

First, on 29 November 2019, the Queensland floods class action judgement was delivered by Beech-Jones J in Rodriguez & Sons Pty Ltd v Queensland Bulk Water Supply Authority trading as Seqwater (No 22) [2019] NSWSC 1657. Secondly, on 27 November, the Victorian government introduced legislation which would permit lawyers to charge “contingency fees” in class actions, that is, legal costs payable to the law practice would be calculated as a percentage of the amount of any award or settlement that may be recovered in the proceedings (subject to court approval). Thirdly and finally, the High Court delivered judgement on 5 December finding that the Courts were not empowered to make common fund orders (CFO) in class actions at the beginning of claims or at an interlocutory stage. Click here to read the full article.

3. Glencore Threatened With Class Against Lawsuit That Could Run Into the Billions

Mining and commodities giant Glencore could be hit by a class-action lawsuit running into the billions, a law firm said today. Glencore confirmed today that the Serious Fraud Office (SFO) had launched a bribery investigation into its activities. US law firm Boies Schiller said today it had secured litigation funding and after the event insurance for a claim against Glencore on behalf of institutional investors and traders. The claim is expected to be brought for damages under the Financial Services and Markets Act 2000 for losses caused by the miner’s falling share price. Click here to read the full article.

4. Next Economic Downturn Will See Increase in Structured Finance Litigation

Investors in asset-backed securities rarely relied on litigation to recover their losses. But that changed following the 2008 financial crisis, and investors are more willing to sue, explain Kasowitz Benson Torres LLP attorneys. They look at two ABS areas certain to see an increase in litigation when the next economic downturn arrives. Click here to read the full article.

5. Exxon Win Casts Doubt on Climate Securities Fraud Suits

Exxon Mobil Corp.’s resounding victory over New York’s allegations that it duped investors about the climate change-related risks to its business shows that government officials and investors will have a tough time using securities laws to pursue climate-related suits against energy companies.A New York state judge said Tuesday that state Attorney General Letitia James’ office failed to support its blockbuster allegations that Exxon made material misstatements about how it accounted for climate-related risks and that its climate disclosures had a material impact on investors. That’s the threshold for sustaining claims under the Martin Act, the powerful New York securities law that doesn’t require the government to prove fraudulent intent.The judge’s conclusion that the state didn’t clear even that relatively low bar vindicates Exxon’s decision to fight the highly publicized claims at trial, said Ronald Colombo, a securities law professor at Hofstra University’s Maurice A. Deane School of Law. And it could embolden companies that face similar accusations to take their chances in court, he said. Click here to read the full article ( subscription may be needed).

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