|  | | 2006 News and Press Releases | | |
HEADLINE NEWS:
Europe A Wary Step Closer To Class Actions; A Distant Cousin To U.S.-Style Litigation
Peter Geier
The National Law Journal. December 4, 2006
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EXCERPT: While class actions were for the most part unknown in Europe as recently as five years ago, the European landscape has shifted so that forms of class litigation are increasingly available to consumers, and more private parties are bringing antitrust claims. The French government presented a draft bill this month that would for the first time allow consumers to take companies to court collectively, rather than force them to bring individual lawsuits. England, Sweden, Spain, Germany and the Netherlands already have some form of class litigation. The Irish, Italian and Finnish governments are considering legislation to implement procedures that could be brought by multiple parties. Norway's Mediation and Civil Procedure Act, which established an opt-in class action procedure similar to Sweden's, takes effect next year. And Denmark's justice minister submitted legislation to the Danish parliament in October that would implement an opt-in class action procedure similar to Norway's. But European Union judicial systems, with rules that limit the discovery available to plaintiffs, bar punitive damages and make losers pay lawyer fees of both sides, have not yet accommodated anything as broad and freewheeling as U.S.-style class action litigation. Elusive connection Meanwhile, American plaintiffs' lawyers have been cultivating a client base of sophisticated European institutional investors--such as mutual funds, pension funds and insurance companies--as a potential new source of recovery in U.S. litigation. They also have been keeping an eye on wrongdoing by multinational corporations in Europe with a view to bringing actions on similar theories against those companies in the United States. Seth Aronson, head of O'Melveny & Myers' securities litigation practice group from the firm's Los Angeles office, said that jurisdictional bars generally prevent foreign investors who purchase shares on foreign exchanges from bringing actions in U.S. courts. 'What the plaintiffs are trying to do is find a U.S. connection,' Aronson said, adding that they also are trying to find ways to sue foreign companies in U.S courts. 'There's definitely a movement afoot by plaintiffs' lawyers to expand U.S. securities law to capture foreign issuers and sue them in the U.S., ' which means that 'there's a risk to European businesses that they will be hauled into court in the U.S.,' he said. |
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