May 01, 2011
"After Morrison: The Case for a New Hague Convention on The Law Applicable to Securities Frauds", in 5.1 Dispute Resolution International, May 2011.
On 24 June 2010, the United States Supreme Court rendered a decision in the Morrison v National Australia Bank Ltd case that has not gone unnoticed outside of the United States as, by definition, it relates more to foreign litigants than to US litigants. The decision firmly rules against foreigncubed securities class action lawsuits, thus named because, from the point of view of the United States, they are foreign in three respects: they are between non-US plaintiffs and non-US defendants and relate to the quality of stock market information given by a company listed outside of the US.
There is quite a strong temptation for foreign litigants—in practice, for lawyers specialising in representing plaintiffs in class action lawsuits that they themselves have initiated after identifying suspicious movement on a share price—to bring such matters before a US court, despite their obviously being more closely linked to one or more other legal systems. The point is to benefit from the US procedural arsenal, which is intended to create a high level of legal uncertainty in the hope that it will facilitate the settlement of collective disputes that, in this way, find themselves subject to an original form of regulating economic relations. This is in line with the purest liberal tradition since both initiating proceedings and settling them are left largely to the parties, while the role of the judge is, for all practical purposes, limited to merely confirming the settlement that has been reached amicably between the class’s lawyers and the defendants. [...]
Foreign litigants—or their self-appointed lawyers—therefore have every reason to try their luck before US courts, even if the US legal system does not seem to be the most closely connected to the dispute. As we discuss, this temptation will survive the Morrison decision, which will eventually make addressing this issue on the international level indispensable.
This is what [Emmanuel Gaillard] proposes to show (III) after having reviewed the content of the Morrison decision (I) and its foreseeable consequences (II).
Emmanuel Gaillard represented France in its amicus curiae intervention before the United States Supreme Court in the Morrison case.