The value of securities class action settlements soared in 2020 driven by an increase in so-called “mega” cases, according to proxy advisory firm, Institutional Shareholder Services Inc. (ISS).
The firm reported that there were US$5.84 billion in worldwide class action settlements last year, up from US$3.62 billion in 2019.
While the value of settlements jumped 61%, the number of cases was only up by 13% from the previous year.
The main driver of the increase in the dollar value of settlements was a surge in the size of the very largest cases, ISS noted.
For instance, in 2020, there were two cases that settled for over US$1 billion and several others in excess of US$100 million. Whereas in 2019, the largest class action settlement was less than US$400 million.
The vast majority of class action settlements came from the U.S. There were 91 cases settled in U.S. federal courts for US$5.2 billion and another 23 cases resolved in state courts, with US$229.7 million. Regulatory disgorgements in the U.S. added another US$93.9 million.
Outside of the U.S., ISS reported that there were 10 settlements in Canada, totalling US$117.2 million.
There were also six settlements in Australia for US$173.2 million.