Shareholder lawsuits coming in Europe: Report

Analysts have predicted a potential surge of lawsuits stemming from the growing corporate governance and accounting scandals across Europe.

A recently published report said new accountability standards for corporate directors and officers, an emboldened legal community and shareholder activism are creating a more hospitable environment for collective lawsuits.

The report is the first in a series of quarterly reports on corporate governance, shareholder litigation and directors & officers liability insurance in Europe from Advisen..

“Shareholder activism has been commonplace in corporate America for some time, but until recently Europe had been relatively immune to litigation resulting from lapses in corporate governance or questionable accounting practices. The dynamic nature of this market, and our prediction that it will remain dynamic for some time, compelled us to offer clients a perspective on the governance, litigation and insurance trends.

David Bradford, editor-in-chief of Advisen and author of the report

According to the research, corporate governance and accounting scandals have cost European investors billions of Euros in recent years, leading to new disclosure requirements, enhanced shareholder protections, and a greater willingness on the part of investors to litigate.

David Bradford, editor-in-chief of Advisen and author of the report, said: “Shareholder activism has been commonplace in corporate America for some time, but until recently Europe had been relatively immune to litigation resulting from lapses in corporate governance or questionable accounting practices. The dynamic nature of this market, and our prediction that it will remain dynamic for some time, compelled us to offer clients a perspective on the governance, litigation and insurance trends.”