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FAQs (U.S. Based)


1. What is a class action?

A class action is a representative lawsuit which allows an individual or entity to initiate a lawsuit on behalf of other individuals or entities who are in the same or similar circumstances with respect to a given defendant. A class action is appropriate when many people have been affected by a company's course of conduct in a similar fashion.


2. What is a class period?

A class period is a range of dates within which a company is alleged to have been engaged in improper conduct. The attorneys investigating and prosecuting a case will review the facts of the case, and along with the court-appointed Lead Plaintiff, determine the appropriate beginning and end of a class period. Sometimes, after an initial complaint is filed, a class period will be lengthened or shortened as an investigation continues. If you purchased the securities of a company during a class period, you are automatically a class member, regardless of whether you specifically retain a law firm to prosecute claims on your behalf. This "class membership" concept is also true with respect to consumer fraud class actions and antitrust class actions. For example, if you purchased goods from a company that was accused of improper marketing practices during the relevant period of time (the class period), you would be a member of the class for a consumer fraud class action, even if you did not personally retain an attorney.


3. What is a lead plaintiff?

A lead plaintiff in a class action brought pursuant to the federal securities laws, sometimes referred to as a named plaintiff or representative party, is typically appointed by the court within 90 days of the publication of a notice of the pendency of the class action. In these types of actions, the court selects the class member or members most capable of representing the interests of the "absent" class members. There is a statutory presumption that the class period investor or investors with the largest financial losses, who are otherwise typical of the "absent" class members and are adequate to represent those class members, are considered the "most adequate" plaintiff. Courts have appointed individuals, groups of individuals, institutional investors, groups of institutions, or even combinations of both as lead plaintiff as the circumstances of each case may dictate. The lead plaintiff selects counsel to represent the lead plaintiff and the class, and these attorneys if approved by the court are lead counsel or class counsel.


4. How long does it take to prosecute a class action?

The time to prosecute each class action varies based on the facts, parties, and jurisdiction of a particular case. It is not unusual for a class action to take up to 3 years to complete.


5. What is contingency fee litigation?

Contingency fee litigation refers to situations where attorneys only get paid if they win the case at trial or if the action settles. Attorneys who practice on a contingent fee arrangement typically do not receive any form of monetary payment from a client at the outset of litigation. Rather, the attorneys' fees are paid only once there is a successful resolution from any settlement or judgment that is achieved. There are no out-of-pocket expenses for the plaintiffs as Pennsylvania law allows Kessler Topaz to advance all such costs on behalf of its clients. Kessler Topaz handles virtually all of its cases on a contingency fee basis.


6. What will it cost to be involved in a class action?

Because Kessler Topaz prosecutes class actions on a contingency fee basis, there are no out-of-pocket fees or expenses paid by the client, regardless of the outcome of the case. If we are successful in obtaining a recovery for the class, we will apply to the court for a fee that fairly represents the work performed and risk assumed by Kessler Topaz. In securities class actions, attorneys' fees typically are awarded as a percentage of the relief achieved by the attorneys for the class. These percentages vary considerably based on the size of the recovery for the class, the length and complexity of the litigation, and several other factors.


7. Will my out-of-pocket loss equal my damages?

Damages are a complex legal calculation that may or may not equal your out-of-pocket loss, which is a purely economic calculation. To establish damages in securities class actions, lead counsel typically hire experts to determine the extent by which a company's stock is artificially inflated during the relevant class period. Because there are often other factors which contribute to stock movement, factors which experts readily assess, one's damages are not necessarily the equivalent of out-of-pocket loss.


8. Do I have to keep my stock to participate in a securities class action?

No. As long as you purchased during the class period, you are eligible to participate in any recovery that the class enjoys regardless of your current holdings.


9. Why should I work with Kessler Topaz?

Kessler Topaz has specialized in class action litigation for more than 25 years, and has represented all types of investors in recovering financial losses caused by fraud or other misconduct. Kessler Topaz has developed a global reputation for excellence and has recovered billions of dollars for victims of fraud and other corporate misconduct.

FAQs (Non-U.S. Based)


1. I’m a U.S. investor, why should I be concerned with class/collective actions outside the U.S.?

In 2010, the U.S. Supreme Court issued a decision, in Morrison v. National Australia Bank, which fundamentally altered the securities litigation landscape. As a result of the Morrison case, investors who purchase securities on non-U.S. markets may no longer use the U.S. courts to seek to recover for fraud-based investment losses. Investors must now look to jurisdictions outside the United States in order to recover. Since, according to a 2012 study by NCPERS, an average of 17.4% of public pension fund portfolios are allocated to international equities, ignoring litigation outside the United States can have a significant impact on a fund.


2. How do class/collective actions in non-U.S. jurisdictions differ from class actions in the U.S.?

Every jurisdiction is different. Jurisdictions such as Canada and Australia have allowed for class actions for quite some time but the concept is non-existent, new, or under debate in many other jurisdictions. Some jurisdictions, while not allowing for a U.S. style class action, utilize other procedural mechanisms that allow for multiple parties to join together and pursue their actions at the same time. Perhaps the most important common difference for investors to be aware of is the difference between an opt-in jurisdiction and an opt-out jurisdiction. The U.S., Canada, and Australia (although many third party litigation funding arrangements make Australian actions more akin to an opt-in action) are all opt-out jurisdictions, which means that an investor, who is not seeking to serve as the lead plaintiff, does not need to take any affirmative steps at the commencement of an action in order to be included and can share in either a settlement or a favorable judgment simply by filing a claim form after the case is resolved. Many other jurisdictions, however, require an investor to opt-in, or take affirmative steps to join an action at the beginning, and failure to do so precludes the investor from sharing in any recovery.


3. What will it cost to become involved in a class/collective action in a non-U.S. jurisdiction?

It depends on the jurisdiction. Canada, for example, operates in a similar fashion to the U.S. and attorneys will usually represent class action clients on a contingent fee basis. Many other jurisdictions, however, prohibit attorneys from representing clients on a contingent fee basis and as a result investors who wish to pursue an action will typically be required to pay a pro-rata portion of the attorney’s fees and court costs. Some jurisdictions are also “loser-pays” systems, which means there is a risk that if investors are unsuccessful in an action they could potentially be liable for the costs and fees incurred by the defendant in defending the action. In some other countries, like Australia, since contingent fees are prohibited between clients and attorneys, third party litigation funding is utilized as a means of reducing or eliminating the risk to investors in pursuing and action. When a case has a third party litigation funder, an investor is usually required to sign a funding agreement in which the investor agrees to give the third party litigation funder a percentage of any recovery and in exchange the third party litigation funder assumes all the risk for the lawsuit and pays all the attorney fees and court costs.


4. How can Kessler Topaz assist me with cases in non-U.S. jurisdictions?

Kessler Topaz has been at the forefront of representing institutional investors in litigation in non-U.S. jurisdictions and the Firm is currently actively involved in representing clients in shareholder litigation in the Netherlands, France, Canada, the United Kingdom, and Japan. the Firm devotes considerable resources to following legal developments related to securities litigation and class/collective actions around the globe and is well-equipped to assist clients in determining whether to join a particular action and, if a client joins a particular action, to assist them in navigating the complexities of non-U.S. legal systems and dealing with local counsel. the Firm is also able to monitor non-U.S. cases for our clients and ensure they are participating in any and all settlement opportunities – something U.S.-based custodian banks are not equipped to do. To that end, Kessler Topaz works with law firms in a number of countries around the world, including the Netherlands, France, Canada, Australia, United Kingdom, Germany, Sweden, Denmark, Italy and Israel, to assist the Firm with tracking cases and settlements in their respective jurisdictions, and also with evaluation trends in shareholder litigation. We are currently following more than 80 actions outside the U.S. for our clients, and have alerts set up in 13 countries to advise us each time a new action is filed.