ERISA Litigation: "Important Component of the Subprime Litigation"

A very interesting paper–”Legal and Economic Issues in Litigation Arising from the 2007-2008 Credit Crisis“–notes how “ERISA litigation represents an important component of the subprime litigation” due to the fact that ERISA provides “legal advantages” to plaintiffs over the securities laws:

First, plaintiffs do not need to establish scienter, as is the case under Rule 10b-5. Rather, liability is based on a defendant breaching its fiduciary duty. Second, the damages resulting from a breach of a fiduciary duty under ERISA have tended to be quite generous, at least as reflected by the terms on which ERISA lawsuits were settled pre-Dura Pharmaceuticals.

Harvard Law Professor Allen Ferrell, a co-author of the paper, discusses the paper at the Harvard Law School Corporate Governance Blog.

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