GLOBAL -Coughlin Stoia Geller Rudman & Robbins was involved in the most shareholder class action settlements in 2009 and handled the most compensation to shareholder as a result, according to research conducted by RiskMetrics.

The Securities Class Action Service (SCAS) top 50 study found Coughlin & Co helped their clients to agree 34 shareholder settlements in 2009, worth $1.58bn (E1.2bn)
The top 50 plaintiffs' law firms were ranked according to the total sums in dollars of redress they generated  through securities class action settlements by serving clients either as lead or co-lead counsel.

Law firm Milberg came a close second in the top 50, with redress worth $1.44bn, although the sums involved in individual cases were higher on average as it was involved in 10 cases, compared with Couhglin & Co's 34 settlements which generated an average settlement of $46.4m per case.

Bernstein Liebhard ended the year in third place with total settlements worth almost $1.02bn while Barroway Topaz Kessler Meltzer & Check was fourth with $889m and Barrack, Rodos & Bacine was just behind in fifth with $887m in settlements last year. The assessment did not count derivatives case settlements.

While this demonstrates the sums of money that can be involved in securities class actions,  concerns have been raised about the UK government's decision to remove a mechanism for delivering class actions in the UK.

Changes allowing groups of European investors to seek redress from the financial services industry were removed from the Financial Services Bill 2010 at the last minute, just ahead of Parliament being dissolved, in a bid to push the FSB through.

Yet  Stephen Everard, managing director of Goal Group, said this leaves investors, including pension funds, without a route for ensuring corporations maintain good corporate governance.

 "The main goals of the class actions mechanism are generally viewed as improving corporate governance and strengthening shareholder rights - in other words, encouraging corporate management to behave honestly and responsibly and providing a means of redress if this does not happen," said Everard.  

"It is therefore disappointing that the proposed amends to the Financial Services Bill will be dropped as there evidently is a need for class actions to be included. A number of European investors - including those in the UK - currently have no right to redress as there is no efficient way to bring a joint lawsuit despite having suffered fraudulent or irresponsible corporate behaviour.

He notes the need for some of recourse system was previously highlighted by the UK's Civil Justice Council when they argued "there is a need for better redress of common grievance which have allegedly given rise to monetary loss and damage to a class of claimants".

While most class actions are still conducted in the US, as the RiskMetrics study of legal firms backs up, there are other legal models to adopt as there have been occasional legal cases in the Netherlands, and this legal framework could suit the needs of European investors, suggests Goal.