Analysis: Global Class Action Lawsuits – Origins, Impacts, and Future Steps

ted that the surge in global actions outside the U.S. is a significant trend to monitor. They highlight the increase in securities class actions filed internationally since 2021 as evidence of a shift in global litigation trends, driven by factors such as evolving collective-redress frameworks, the growing involvement of institutional investors, and the expansion of the litigation funding market.

Guillaume and John emphasize that the recent uptick in global class actions is not the result of a single cause but rather a combination of factors. They note that recent changes in statutory procedural frameworks for collective actions, along with the infusion of third-party funds to support collective litigation, have played a role in facilitating this rise. The authors point to legislative reforms in countries like New Zealand and Singapore as examples of efforts to streamline the process for filing representative actions, making litigation outside the U.S. more attractive.

Furthermore, Guillaume and John discuss the adoption of opt-out collective actions in Europe as another indicator of legislative reform shaping the legal landscape. They explain that the opt-out mechanism simplifies the collective action process by automatically including class members unless they choose to opt out. This approach expands the potential for recoveries, reduces costs associated with claim aggregation, and strengthens bargaining power in settlement negotiations. By allowing plaintiffs to pursue larger cases more efficiently, opt-out regimes can lead to increased ease of bringing cross-border cases.

The authors also delve into the role of litigation funding in supporting global class actions. They note that while some advocate for litigation funding as a means of enhancing access to justice, others raise concerns about excessive litigation, windfalls for funders, and burdensome cost implications for defendant businesses. Guillaume and John highlight the potential for the growth of litigation funding in the EU, citing the EU Parliament’s discussion on the topic in 2022, which reflects a growing interest in utilizing this model to enable claims and influence future developments in the legal landscape.

In conclusion, Guillaume and John assert that the international securities litigation environment is evolving and warrants continued observation. They anticipate that legislative bodies worldwide will continue to shape the future of collective redress actions within their jurisdictions. The authors emphasize the importance of monitoring the ongoing changes in global class action litigation, driven by factors such as opt-out collective actions and the rise of third-party litigation funding. As the global landscape continues to evolve, the authors underscore the need to stay abreast of developments that may impact the international securities litigation arena.