The U.S. Securities Fraud Class Action: An Unlikely Export to the European Union
Manning G. Warren III
University of Louisville - Louis D. Brandeis School of Law
September 1, 2012
37 Brooklyn Journal of International Law 1075
University of Louisville School of Law Legal Studies Research Paper Series No. 2013-10
Although the EU has achieved an impressive degree of harmonization in the securities laws of its member states, it has not yet advanced any effective collective private remedies for violations of those securities laws. This is especially noteworthy since the U.S. Supreme Court's decision in Morrison v. National Australia Bank left many defrauded European investors without access to the U.S. class action remedy, which previously had been the only meaningful collective redress mechanism available to European investors. Recently, the European Commission has made it clear that if it were to adopt a collective redress mechanism, the U.S. class action remedy would serve as a model of what not to do. This article explores the viability of the U.S.-style securities fraud class action in the EU. It first examines the rise of the securities fraud class action device in the U.S. and subsequent legislative and judicial restraints on investors' ability to utilize the mechanism. The article then discusses the cultural views and judicial principles inherent in the European litigation system that serve as significant barriers to member states' adoption of a U.S.-style class action procedure. Finally, the article concludes that aside from episodic successes achieved by industrious U.S. plaintiff lawyers pursuing collective relief in the Netherlands, the U.S.-style securities fraud class action is unlikely to become a viable mechanism for providing European access to justice for defrauded investors.
Number of Pages in PDF File: 41
Keywords: securities, securities fraud, class action, European Union, export, securities litigation model, securities fraud class action, collective redress, collective private remedies, EU member states, supranational remedy, harmonization
JEL Classification: F30, F33, F36, F39, G10, G15, G18, G19, G30, K41, N4Accepted Paper Series
Date posted: February 26, 2013
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