CLASS ACTION LEGAL STRATEGY as per my email to Mr Tan Kin Lian

Hi Kin Lian,

Thanks for your query on the collection legal action or class action. You may post in in your blog and I thank you in advance.

Update of class action

At the onset, I have met some 200 investors at my law firm for the legal briefings for the Lehman fiasco. I am heartened to report that they are all keen to join the class action.

A class action occurs when all the plaintiffs suffered a common greviance and sues together. They will share legal fees collectively to fund the class action and likewise if they lose, they share the legal fees.

I prefer not to discuss the exact legal strategy of the class action in the open. This is to counter the possibiliity that the potential Defendants may counter this and we may lose the element of surprise. There will be a special briefing in a closed door auditorium for the class investors later,

I am in favour of the class action as this pressurises the potential Defendants to defend a collective claim that there is a common pattern of misrepresentation and mis-selling. The class action lends weight to the claims of the investors. They also share evidence.

This is likely to be a multi-million law suit filed in the High Court.

Legal grounds

Briefly, misrepresentation occurs when the financial institutions or its officers made misleading statements, which they know to be false, in order to induce the investors to buy the investment product. One example, the use of the term “Mini-bond”, it is actually not a bond but a complex investment product.

Mis-selling happens when the financial institutions did not do a proper risk profile analysis of its investors before selling the investment product. The investor may be a conservative investor who wants capital protection and yet was sold this complex investment product.

The other general claim is for negligent professional advice. This happens when the financial institution advises the purchase of the investment product wrongly.

There is no possible counterclaim by the potential Defendants in the class action.

Class action mechanics

As a start, the investors share legal costs of an initial deposit of $1,000. I anticipate the legal costs to be in the low few thousand for each investor in the class actions. For example, 200 investors in the class would have raised $200,000 to fund the class action.

We have collected the cheques from them in preparation for the class action but the cheques were not banked in yet. Once their efforts to resolve with the financial institutions fails, we will proceed to file the class action.

Past class action background

As a matter of background, I represented a successful class action in the Wen Long Money changer remittance scam whereby 900 over Chinese nationals sued Mr Lum Chen Fong, who siphoned off almost $4.75 million. The Chinese Nationals wanted the moneychanger to remit their money to China but he failed to do so. We were successful in the recovery.

I will be glad to work together with you in the class action. There is only strength in unity of the investors. My Lehman hotline is 9845 6225. My Lehman e-mail is lehmanlawyers@gmail.com

Tan Kin Lian's email to me dated 22 October 2008.

Leonard

Can you give me a proposal for collective legal action. I wish to post this in my blog and ask the investors to indicate their desire to participate in this collective action.

In your proposal, please indicate the grounds for the action, the approach to be taken, the expected legal cost to the investor and the chance of winning. Please indicate the additional cost, if the investor loses the case and has to pay the other party's cost.

Thanks.


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Tan Kin Lian