“Over the last two or three years there has been a marked increase in shareholder disputes,” says Sean Upson, Partner in the Commercial Litigation team, an expert on shareholder litigation.
In a recent special report Financier Worldwide Magazine covered the topic “Tackling Shareholder Disputes” in a Q&A forum featuring a panel of leading experts from across the legal sector.
The forum discussed the reasons behind the rise in shareholder litigation in the UK. These include the advent of Group Litigation Orders, a maturing UK litigation funding market, and changes in the legislative and regulatory framework.
The forum also examined the legal challenges these types of cases pose, strategies for companies that may be facing such actions, and alternatives to litigation in resolving shareholder disputes.
Sean Upson featured on the panel which also included lawyers from Norton Rose Fulbright LLP, Seward & Kissell LLP and Skadden, Arps, Slate, Meagher & Flom LLP.
On the “rise of shareholder litigation”, Sean said:
“This trend has emerged for a number of reasons.
First, there has been a rise in institutional shareholder activism. This has most prominently been about institutional investors challenging boardroom pay but that same activism has driven pension funds and hedge funds to pursue claims for misleading financial statements.
Second, the appetite for claims from corporate ‘scandals’ has crossed the Atlantic – and so shareholder claims often arise from an issue which has had a lot of press attention, such as the VW emissions scandal. Third, the legislative and regulatory framework has facilitated such claims. The amendments to the Financial Services and Markets Act, which allow claims for misleading published statements, are still relatively new but investors are increasing using the new provisions to bring claims.
Finally, the maturing UK litigation funding market has enabled investors to pursue their claims whilst taking the cost and risk off of their balance sheet.”
To read further thoughts of Sean and his peers, read the full article – Financier Worldwide – FORUM: Tackling shareholder disputes.
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