Class actions--where a large group of individuals pool legal resources to file a unified claim alleging a “widespread wrong”--are quite common in the US, Bill Lockwood, conducting officer of Franklin Templeton Investments in Luxembourg, told Delano during an interview.
The European Commission is currently examining the need for an EU collective redress framework, explains Lockhood. The Commission issued a consultation paper this spring to study if there was a need for a pan-European system and if some American features could be effectively adapted into EU rules.
The Commission has not said when it will take its final action. “The jury’s still out there,” he says, noting there are still 27 differing national systems to contend with. “The plan is to come out with proposals, but there’s no consensus about coming out with an EU plan, as some countries have quite developed solutions…. and some have nothing at all.”
“The idea is take some aspects of the US class action world, bring them to Europe and try to put some safeguards around them to make sure it works here. Because if you don’t put safeguards around it, it is a system open to abuse,” says Lockwood, who will serve as panel moderator during the American Chamber of Commerce in Luxembourg event.
In cases of “widespread wrong” today, European asset managers may feel obligated to pursue legal action out of their duty to protect their investors, however they must also consider the cost and risk involved. So Lockwood reckons there is a “missing tool” in European law today, as it is difficult to individually seek redress in complex cases.
Lockwood stresses it will be an educational event, not technical. “The whole thrust is how do we go about making things go better.” There will be presentations by a leading US attorney in the field, Lawrence Sucharow, and François Kremer will put the Luxembourg legal perspective into view. Galen Vetter from one of the largest class action administration firms will give a behind-the-scenes explanation of how such suits work.
The seminar “Class actions: a purely US phenomenon?” is organised by AMCHAM’s finance committee and supported by ALFI.
Tuesday, October 25
18:30
BGL BNP Paribas, Luxembourg-centre ville