(Pictured: Brian Slade)
In a timely confirmation of something we all suspected – in a week when lawyers Maurice Blackburn announced their Class Action against each of the big banks over credit card charges – the Goal Group predicted that the number of securities class actions in Australia was about to rise significantly.
Andreas Costi, who established Goal’s Australian office in Melbourne last year, predicted last week that securities class actions, which had been averaging 11 a year in Australia for the past few years, would rise to about 20 a year following the entrant of a new and aggressive specialist law firm.
The new firm, ACA, joins Maurice Blackburn and Slater and Gordon as specialists in this field. Goal, which started life in 1989 in the UK as an investment technology company, is now one of the world’s major providers of securities class action outsourcing services and global withholding tax reclamation services. It covers 13 markets from offices in five countries. Goal has recruited Brian Slade, a former managing director with BNY Mellon, to head up its Australian business development.
The Global class action service supports corporates and institutions such as superannuation funds, fund managers and custodians that have suffered financial loss from owning shares in a company where there has been mismanagement or unlawful behavior. Goal has more than 1,500 live global class actions within its database.
The firm started this service in 2007 with the purchase of the first non-US class action filing firm, which Costi was the first employee of. Costi spent 12 years in the UK with Goal and its predecessor before transferring to Australia in January last year. Before that he worked for several custodian banks and brokerage houses.
The withholding tax reclamation service is currently licensed by 15 financial institutions, to provide a reclaim service for tens of thousands of individual underlying clients and 120 clients use Goal for the tax reclamation outsource service including one of the largest fund managers in Australia. This service grew out of Goal’s roots as a software provider for tracking withholding tax which is available for repatriation.
The withholding tax reclamation software was originally sold to the major global custodians, and still is, but, these days, is available as an advisory service to a broad range of funds management and investor organisations.
Goal estimates that more than A$31.5 billion of withholding tax is deducted globally each year and that its products and services facilitate the recovery of about A$11.5 billion of that. However, there is still about A$10.6 billion left unclaimed by its rightful owners.
On the class action side, Slade said that the group has a unique proprietary capability for calculating actual losses for class action claims which a well-known global litigating firm has licensed. He said that there might be political reasons that a client fund or manager did not want to proceed in joining a class action but they still needed to know what was going on so they could inform their own clients or members, as there is a fiduciary duty of care.
“We send out alerts covering those 13 jurisdictions and we are looking at adding another 16 jurisdictions to our coverage as they develop a class action framework,” he said.
The evidence from UK clients, for which there is the most data, is that when they participate in US class Actions they will add an average of 5bps, net of fees, to their returns. When participating in class actions outside the US, where payouts tend to be smaller, they add an average of 3bps.
Goal charges no up-front fees for the class action service, then only a small percentage on recoveries, after the law firm’s fee.
Because it is independent of any institution, Goal acts on behalf of unit holders or members of a fund, so the fund or custodian can feel more comfortable employing Goal without damaging its own relationships.
Goal is still privately owned, with 55 shareholders, but is considered likely to IPO in the foreseeable future. They have also recovered over A$1.19 trillion for their clients who have participated in global class action cases.