UK shareholders cannot sue insurers who withhold information on large claims, as they can in the US, a class action expert has said.
In the US last week, shareholders filed a class action against St Paul Companies over its handling of an asbestos claim that cost the insurer almost $1bn (£641m) and sent its stock plummeting.
The action claimed St Paul did not make adequate public disclosures about the Western MacArthur claim.
St Paul said it would contest the action vigorously. But Davies Arnold Cooper partner Richard Highley said shareholders were unable to bring such a claim in the UK courts against an insurer.
"We do not have class actions or the securities legislation for shareholder actions," he said.
"We have group litigation orders in the UK, which have different, limiting, characteristics to the US class action. In particular, plaintiffs have to be named individually and can't just sue `as a class'."
Highley said shareholders could sue for losses suffered by them as a result of misleading statements by directors, but that the hurdles to doing so were almost insurmountably high.
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