In matters of fraud and other financial misconduct, and even when investment losses are not deliberate, customers and other creditors may seek ways for indemnification. Individual legal action in such matters is often time consuming and expensive, with unpredictable outcome. Complicated and opaque financial transactions with an often international character require specific industry expertise to unravel such schemes and recover funds for victims. To mitigate risk and share discovery, process and litigation costs, collective action may be justified. An additional advantage of group efforts is that several recovery strategies can be followed to advance the potential outcome of these procedures.

Bank failure, investment fraud and losses incurred by other acts in banking and finance leave creditors in difficult situations. Bank failure involves exorbitant matters like the BCCI scandal, excessive risk taking from Lehman Brothers, unclear cross-border transactions as in the ABLV closure, and softer statutory administration as it happened with Lucayas Bank. These examples reveal the complexity of the global financial system and the lengthy and difficult procedures, and often disappointing results. Other common and deliberate actions to depart investors from their money involve different types of advance fee fraud and trading platform fraud.

The common response when individuals and companies are about to lose money is rather emotional. Alleged victims seek ways to revert time and restore their balance. This applies to (offshore) bank failure, investment fraud and other well thought and deliberate, or plain ignorant and unplanned investor losses. In general, the human mind has a better direction towards profit, than for losses. For asset and fund recovery purposes, emotional barriers must be set aside instantly to strategize for recovery, mitigate further deprivation and ultimately maximize repayments.

Collective claims are advantageous where they allow different plaintiffs to form a group and distribute costs over all group participants. Such groups can allocate a group budget that allows for strong legal action with sophisticated legal advisors, whether or not via an intermediary. The US based model of the ‘class action’ leads the example for the group structure, even though not all courts allow the group to file damages at once and sometimes individual creditors still need to substantiate and submit their individual claim. Yet, the benefit is more in the preparation and firmness of the initial stages and in particular the early willingness for a settlement.