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Pension funds are missing out on a potential share of $12bn (£6bn) in unclaimed litigation settlements in the USA, according to a class action specialist.

A study by GOAL Group found class action cases carried out between 2000 and 2007 amounted to $3.6bn (£1.8bn) in unclaimed settlements for European investors, with around 25% of this figure attributed to UK investors.

Stephen Everard, managing director of GOAL Group, said despite the large amount going unclaimed, there had been a significant growth in interest from UK local authority pension funds in pursuing litigation to recoup losses.

“I think getting into litigation with overseas companies has probably been outside of the traditional thinking for some local authorities. But since the Bath and North Somerset and North Yorkshire pension funds teamed up in a class action, things have started to move forward. More are starting to recognise the sheer enormity of the money that is out there,” said Everard.

“The advantage of being a lead plaintiff is that you can dictate the class period and can get three or four times more than other participants in the case, so you can have some influence. Some are more proactive than others and they recognise that there is something they should be doing.”

Everard said eight local authorities had either signed up or come to his company expressing an interest in pursuing class action litigation, with many realising it is part of

their fiduciary duty to file claims on behalf of investors. He said the Avon pension fund’s role in becoming lead plaintiff against GlaxoSmith-Kline, has had an influence on other local authorities.

“A UK authority may be concerned that it is an admission of investing in the wrong company, but I think in the Bath and North Somerset case, there is a positive kudos in being lead plaintiff, as undoubtedly a large number of other investors will have shares in GlaxoSmithKline.”

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