GOAL Group, the class actions services specialist working with UK local authorities and other investors, reacted to the news that a class action lawsuit is to be brought against RBS in the US courts by emphasising that all UK local authorities with investments in the bank should be ready to participate in the case.
Local authorities not participating in US class actions such as the RBS case risk losing out on a massive opportunity to seek compensation and plug their escalating pension gap,” says Stephen Everard, managing director, GOAL Group.
There remains a common misconception that the effort involved in filing a claim outweighs the benefits, however this is simply not true and there are already many precedents of authorities successfully claiming compensation for financial losses incurred in the credit crunch.
Previously, GOAL Groups own research has shown that at least 25% of all claims that could be filed by local authorities between 2000 and 2007 were not submitted to the US courts, resulting in a loss of 200 million. However, with a new wave of class actions instigated by the credit crunch, these losses are set to escalate if local authorities do not get on board.
The RBS case is a real wake-up call for all UK local authorities that they can no longer afford to ignore their legal right and indeed responsibility to participate in US class actions, continues Everard.
Local authorities are particularly exposed in the credit crisis because of their widespread investments in banks. With pension deficits on the rise, we expect to see more and more investment managers taking an active role in this type of collection lawsuit.
L.D.