Class Actions could increase in the UK
Types of legal cases known as “class actions” are becoming more widely known and understood in the UK. They act as a way for individuals and companies to make joint, mass claims, instead of a series of individual claims, against a company. The process is seen as a more efficient way of securing settlements, and also helps to prevent against inconsistent decision making. These types of legal cases first began in the United States of America in the 1960s, primarily with a view to helping to enforce civil rights legislation. This process of litigation is used to support those seeking damages arising out of securities law violations, consumer fraud, human and civil rights violations, employee benefits disputes and environmental damage to a community caused by a company. Today, it is big business in the United States.
Settlements arising from class actions peaked in 2005-06, with the largest payout ever in the case of Enron’s $7 billion bill. In 2008, $31 million dollars was reclaimed as settlements in securities litigation in the United States. The credit crunch is likely to affect the numbers of cases that are brought, as well as the size of settlements. The current financial climate and record losses experienced in the city and by individuals, surely only increases the potential for increased numbers of claims brought about against companies accused of financial mismanagement. The financial sector expert Goal Global Recoveries Limited estimates that over 8.5 billion Euro goes unclaimed in withholding tax reclamation alone each year.