A recent U.S. Chamber Institute for Legal Reform study on the “real costs” of securities class action lawsuits was met with skepticism by plaintiffs advocates, who questioned the report’s objectivity.
Released by ILR Friday, “Economic Consequences: The Real Costs of U.S. Securities Class Action Litigation” says that investors each year have lost an average of $39 billion from securities class actions while collecting only about $5 billion in settlements since the enactment in 1995 of the Private Securities Litigation Reform Act, which was intended to ward off meritless securities suits. The report, which Navigant Consulting Inc. conducted for ILR, says plaintiffs lawyers are key backers of the current system, noting that securities class actions bring these attorneys an average of about $1 billion per year.
