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The Role of Pension Funds in Litigation Funding

The role of superannuation funds in litigation funding (particularly in class action funding) has been highlighted by industry insiders in Australia, who point to it as a benefit to the funds themselves and also as an encouragement to good corporate governance. The recent example of HESTA, a Sydney-based super fund, taking part in a class action lawsuit against several financial services companies, demonstrated both the appetite and the potential benefits of such engagements.

In an article by Great review, Vice President and Managing Director of Financial Recovery Technologies, Sean Cookson, spoke about this more active approach to investing and highlighted HESTA as a super fund that was able to leverage its capital to push this alternative path. Mr Cookson pointed to the fact that outside of the United States, Australia was one of the least risky countries for funds to join class actions compared to jurisdictions such as Germany and the United Kingdom.

Mary Delahunty, the former head of impact at HESTA, went further and said it was up to the super funds to recoup losses through class action when companies failed in their fiduciary duty to investors. shareholders. However, Cookson and Delahunty warned that for this to be effective, the Australian government will need to backtrack and focus on regulating corporate behavior.

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About Harry Moran