By Jason Harris and Michael Legg*
The financial turmoil and share market losses generated by the global financial crisis have provided ideal conditions for increased numbers of investor class actions. The numbers of firms involved in litigation funding and law firms involved in class actions are also increasing. Australian securities law seems to be at the beginning of a wave of investor class actions based on allegations of inadequate corporate disclosure. The fallout from the global financial crisis (GFC) has also focused attention on the efficiency of Australia’s corporate rescue laws as companies struggle under onerous debt levels and attempt to rebuild balance sheets and restructure operations in much tighter credit conditions than in previous years. This article considers the tension between laws that seek to compensate investors through the use of class actions and laws that aim to promote corporate rescue attempts. It suggests that reform may be needed to ensure that these two important policy goals work more harmoniously together.
The full article can be accessed here: “What price investor protection? Class actions vs Corporate rescue” (2009) 17 Insolv LJ 185.
* Jason Harris: UTS Faculty of Law; Michael Legg: UNSW Faculty of Law. The authors would like to thank the anonymous referee and the Journal’s editor, Dr Colin Anderson, for their helpful comments and suggestions. All errors and omissions remain the sole responsibility of the authors.