Corporate & Securities Law

?Will Aggregate Litigation Come to Europe??

By Werner R. Kranenburg

Just earlier this week (in this previous post) I referred to a research paper on res judicata and how the development of collective litigation procedures in various European jurisdictions is arguably one factor in the easing of recognition concerns of US courts. But what good are procedures if not put to use? That in turn is the concern of the two authors of the paper Will Aggregate Litigation Come to Europe?. From the abstract:

European thinking on the topic appears to have reached consensus on two points… the second [being that] whatever form European aggregate litigation takes, it will not replicate American class action litigation with its domination by entrepreneurial plaintiffs’ attorneys. […] Drawing on America’s long history of collective enforcement, we… ask whether Europe will adopt the incentives and institutional arrangements necessary to make aggregate litigation an effective remedy. Our concern is that Europe’s revulsion at accepting the reality of legal enforcement as an entrepreneurial activity may leave the incipient reforms without the necessary agents of implementation.

As Prof. Samuel Issacharoff and Prof. Geoffrey P. Miller (both of NYU) point out, “it is all well and good to lay down railroad track and invest in a stock of modern trains [b]ut someone has to drive the train.”

WV&Z can only speculate how long it will be until a European court, in a collective action brought exclusively in its own jurisdiction, “notes that class counsel were clearly not motivated entirely by notions of charity and a pursuit of justice for its own sake” before awarding the lawyers who brought the case an “adequate award” in the amount of, say, $31,500,000 in fees plus expenses.

With thanks to Mass Tort Litigation Blog for spotting the paper (posted on SSRN 10 November), picked up by Point of Law and discussed by the D&O Diary and thanks to The 10b-5 Daily for the link to the order concerning attorneys’ fees in the The Coca-Cola Company securities litigation.

Full post as published by With Vigour and Zeal on November 22, 2008 (boomark / email).