Are US-Style Investor Suits Coming to the UK?

Abstract

The UK has enacted a new dedicated civil liability regime in respect of issuer disclosures. This article considers how this regime shapes up when compared to equivalent remedies in Canadian and Australian securities laws and when set against the backdrop of current US debate on reforming investor actions. The article demonstrates that a number of investor-unfriendly features have been included in the new UK civil liability regime. When these features are considered alongside an established civil procedure system that provides only limited scope for collective redress, a clear prediction emerges: the UK is unlikely to see a surge of investor claims alleging issuer disclosure failures. The new regime reflects a policy preference for public over private enforcement. One consequence of the approach that has been adopted is that the new regime is not well-designed to fill the gap should public enforcement efforts under-deter.