Settlement in the RBS rights issue litigation has rightly received significant press coverage. The fact of settlement itself is, of course, noteworthy, although the broader details of the claim are getting just as much press – the huge potential adverse cost liability for the claimants (noted to be in excess of £100m), new law created in the context of security for costs applications and, less substantively, although attracting as many headlines, the fact that Fred Goodwin will now avoid the witness box.
One detail of the RBS rights issue litigation and, indeed, the increasing number of shareholder claims that are being brought more generally, that has not attracted as much attention is the fact that 18 institutional investors brought claims against RBS and have themselves settled those claims.
Receiving almost as much press attention is the increasing number of competition claims being brought in the UK. It seems that the claims attracting the most coverage are those being brought against Visa and MasterCard in the interchange litigation. However, there are plenty of others. To name but a few: claims being brought against the truck manufacturers following their settlement with the European Commission last summer; the ongoing claims against British Airways arising out of the air cargo cartel decision; and increasing mutterings about claims against the banks in the FX space.
Again, going largely unnoticed are the number of these competition claims being brought by large institutions and corporates who historically may have let such claims pass them by.
There are a number of inter-related factors which are driving the rise of shareholder actions and competition claims by large institutions and corporates.
One such factor is increasing knowledge and use of dispute resolution funding.
Knowledge and experience of dispute resolution funding has increased exponentially in recent years. This has been driven by the growth and professionalism of global dispute resolution funding companies, like Vannin Capital, with significant capital to invest in meritorious claims. As such knowledge and experience has grown, large institutions and corporates have become increasingly comfortable using professional third party funders to enable them to bring claims, including shareholder claims and follow-on damages actions, with no cost risk (either own side or adverse costs) to their organisations, but still enabling them to retain for their own benefit, the majority of the damages recovered.
Corporates and large institutions have historically been reticent about funding. However, as funding has become an accepted feature of the dispute resolution landscape across the globe, its benefits to such organisations has been accepted and embraced.
If Vannin’s current case profile is anything to go by, this trend is set to continue and grow through 2017 and beyond.