UK - Fund management companies should not consider themselves to have immunity from litigation, the prosecuting barrister in the Unilever court case has warned.
The warning, from Jonathan Sumption QC who is acting for Unilever in its action against Merrill Lynch Investment Managers (MLIM), follows the J. Sainsbury Pension Fund’s statement that it is also considering action against MLIM, which it used as a UK equity manager up until January 1999.
Sainsbury pension fund manager Geof Pearson said: “It is well known that Sainsbury’s and a number of other pension schemes suffered in a similar way to Unilever in 1997 and 1998. Therefore, if Unilever win their case, there is likely to be similar claims that MLIM is likely to face. Sainsbury’s is known to be considering action.”
Surrey County Council Pension Fund is also thought to be interested in the outcome of the case.
Jonathan Sumption QC said last week: “It would be really unfortunate for [this case] to be a signal to the fund management community that their business is regarded as so judgmental that they are practically immune from legal responsibility even when the client has gone to a great deal of trouble to specify risk tolerance in their contract.”
Sumption added: “We are seeking to set right an isolated case of misfortune which befell our client as the result of the conjunction of an over-ambitious manager and lax management, which fatally combined themselves during a period of two years.”
MLIM is being sued by the Unilever for £130m for underperformance in 1997.
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