NETHERLANDS - A new service has been launched for institutions wanting to bring class action lawsuits against US companies.

Clarese – run by pension executive Rene Bastian – offers intermediary services between institutions and US law firm Lerach Coughlin Stoia Geller Rudman & Robbins LLP.

He says institutions are increasingly interested in recovering losses via collective lawsuits. “It increasingly happens that European investors and asset managers, with large stakes in international companies, face considerable losses because of misconduct of those companies.”

“In general, by not participating in class actions, pension funds forsake on money. Often they don’t seem to have a notion of the amounts involved. A €1bn scheme might be able to recover hundreds of thousands of euros a year,” Bastian, a pension industry executive, told IPE.

“I think the institutions in Europe don’t have a proper picture of the phenomenon yet,” Bastian added. “But in the US with its claim culture, hundreds of class action law suits get started every year. The amounts involved are astronomical.”

Clarese will supply its customers with information on potential class actions, indicate when action should be taken and liaise with the law firm. Moreover, it will supervise the collection of damages in successful cases, Bastian stated. The law firm will work on a no-win no-fee basis.

“I think stakeholders just expect the financial institution to take action, if it becomes clear that fraud has been committed at companies in which they have invested,” he explained.

“It is part of their fiduciary task anyway. In the US, pension funds have been sued for not taking action in similar cases. And class actions on a more structured basis, also fit within the trend of shareholders activism and a better risk management.”