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The Inexorable Move of British Litigation to US Courts?
London and Bermuda Newsletter
Class actions may be slow in coming to Europe, but European plaintiffs are taking a more active role in US litigation … against European companies. After European shareholders in Parmalat and Vivendi tried to have their day in court in the US, with mixed results, a marker has been placed by Bath & Northeast Somerset Council, as administrators of the Avon Pension Fund, in the securities class action against GlaxoSmithKline-Kline. By a decision in October 2007, the federal court for the Southern District of New York appointed the Avon Pension Fund as lead plaintiff in the class action – a first for a British institutional investor. The fund claims that it lost US $2.7 million following a warning issued by the US Food & Drug Administration about GSK diabetes drug Avandia.
In a comment to legal blog “With Vigour and Zeal”, David Paterson, Head of Governance at the National Association of Pension Funds, stated: “Given the quite different legal regimes in the US and UK, I would be concerned if it became common practice to sue UK companies in the US courts. Shareholders have more rights in the UK which they have used effectively to hold boards to account. The more confrontational approach which is the norm in the US does not sit well alongside our ‘comply or explain’ regime which depends crucially on dialogue between shareholders and companies for its success – and it has been successful, so far.”
It remains to be seen whether Mr Paterson’s views are shared as widely as he would hope.
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