NERA Economic Consulting has released a study entitled “Recent Trends In Securities Class Action Litigation: 2003 Early Update.” The study reaches the following notable conclusions:
(1) Although three of the six largest securities class action settlements of all time were in 2003 (Lucent, DiamlerChrysler, and Oxford Health Plans), the average settlement amount fell 15% to $19.8 million as compared to last year. Two-thirds of all settlements in 2003 were for less than $10 million.
(2) There were 210 securities class action filings in 2003. This is consistent, excluding laddering and analyst cases, with the post-PSLRA average of 212 filings a year.
(3) Over a five-year period, the average public corporation faces a 9% probability that it will face at least one securities class action suit.
(4) Following the passage of Sarbanes-Oxley in 2002, there have been one-third fewer dismissals of securities class actions. According to NERA, the “lower rate of dismissal suggests that either cases are proceeding more slowly or that judges are being more generous at the margins in evaluating the merits of cases.”