AUSTRALIA - There should only be a "flurry" of class action lawsuits despite equity market swings which saw the Australian Stock Exchange lose nearly 12% of its value to date this year, according to the head of a litigation funding service.
"There is unlikely to be more than a flurry of class actions," he added.
Ferguson spoke as part of a panel discussion on class action lawsuits at RisMetrics Group's annual corporate governance conference in Melbourne.
The class action is "another tool in the armoury of good governance" according to David Atkins, CEO of the AUS$13bn Construction and Building Industry Super (Cbus) superannuation fund.
"We are proactive in a number of ways to create good governance," Atkins said. "We do participate in a number of initiatives and forums. Class actions are at the end of that road."
Atkins said while Cbus had participated in a number of actions, it did not have the goal of recouping compensation.
"We have a small trustee office and time is very important," he said. "How much of our resources are going to be spent on [pursuing class actions]? We have to be very careful about when we decide to participate."
At the conference Nick Sherry, minister for superannuation, told attendees: "While our regulatory system is sound, the recent turbulence in financial markets has highlighted the need for some fine-tuning to ensure the integrity of our markets."
Sherry said the government was looking to three areas of corporate governance with the intention of legislative reform. These would include corporate offences, sanctions and personal liability for directors.
This would entail "clarifying" standards required of company directors, according to Sherry.
"Where directors fail to meet these standards, the law will ensure that the sanctions imposed are credible, flexible, and transparent," Sherry said.
Treasury has committed to "soon" survey around 600 company directors to "establish what is happening in the boardrooms of our leading companies," Sherry added.
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