Newsletter December 2010

Dear Reader,

 

As we are getting close to the end of the year, we would like to pursue the tradition of highlighting some of the most interesting developments of the last twelve months and also anticipating (or at least trying to) what could await us in the near future.

 

The decision of the US Supreme Court in Morrison vs NAB will undoubtedly be considered as one of the most important evolutions in the legal environment, particularly for those involved in cross border securities litigation. US Courts have already applied the new "transactional test" as designed by the Supreme Court in many cases. But several issues of both practical and legal importance for US and non-US investors still need to be addressed in order for those investors to better identify the available remedies in case of undue losses on their investments. This is far from being the end of the story.

 

The evolution in the United States has had many impacts in Europe where investors are getting more and more familiar with the world of collective actions. Discussions at the EU level on collective redress are still ongoing. Three European Commissioners (Justice, Competition and Consumer Policy) recently issued a joint information note in which they announced their intention to launch a public consultation. The purpose of this consultation will be to elaborate common legal principles and to identify other common principles which should guide any future proposals for collective redress in EU legislation. The start of the consultation is expected any time soon. As experts in this field, we clearly intend to participate in the discussion.

 

The lack of US-style class action in Europe has never been an obstacle to the launch of collective actions by Deminor in several European countries. We have already demonstrated our ability to deal efficiently with the complexities of court actions on behalf of a large group of investors, both from a legal and practical point of view. The many cases which are discussed in this Newsletter illustrate our ability to cope with the challenges presented by collective actions in the current legal context.

 

This does not mean that the legal status quo in Europe should be considered as an alternative. While we expect fierce lobbying from various stakeholders in order to oppose or delay any progress in the access to justice for large groups of plaintiffs, we believe that it is in everybody's interest to make sure that, whenever safeguards and protections have failed to prevent losses from occurring, the victims of those losses, be it investors, consumers or even businesses, should have the possibility to seek adequate compensation. In this respect, issues such as the length, costs and risks of legal procedures certainly need to be addressed.

 

We also believe that it is important to facilitate constructive solutions and settlements as they often provide a suitable alternative to lengthy, costly and risky legal procedures. However, people should be realistic and understand that the launch of such procedures are usually a prerequisite for negotiations to take place. A comprehensive approach is therefore necessary.

 

We certainly do not need a dogmatic discussion as nobody can dispute that investor rights and protection are the cornerstones of a sustainable market economy. Investors confronted with undue losses need solutions, not additional problems or worries. And at Deminor, this will always be our priority.

 

We would also like to take this opportunity to already wish you a happy and prosperous New Year.

 

Charles Demoulin
Partner

 

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