A 'fear of finding out' (FOFO) prevents pension schemes from initiating class action cases related to their investments, Robbins Geller Rudman and Dowd senior advisor, Melissa McDonald, has said.

Responding to a question at the Pensions and Lifetime Association (PLSA) Investment Conference 2025, McDonald said that many pension schemes have an "if I don't know, then I'm not compelled to act" mindset regarding litigation.

"This needs to be addressed, as otherwise, large corporations cannot be held accountable for their actions and words," she added.

McDonald's comments followed two high-profile and successful class actions initiated by the local government pension scheme (LGPS) against major corporations last year.

Following a five-year battle, the UK's Norfolk Pension Fund secured a £380m (USD 490m) recovery in a class action case against technology giant Apple.

A $434m (£338.9m) recovery was also secured in a securities fraud class action suit against American sportswear brand Under Armour, in which the North East Scotland Pension Fund (NESPF) acted as lead plaintiff.

However, Norfolk Pension Fund head of funding and investment, Alex Younger, highlighted the increased financial risk of class action cases in the US compared to Europe.

"Plaintiff law firms in the US generally undertake cases on a contingency basis, meaning that their fees are tied to the case outcome, and hence, they only get paid if there is a successful recovery," he continued.

"The law firm covers all the upfront costs of the case. These can be substantial and typically include court filing fees, court reporters and transcription services, expert witness fees, investigation and research costs, document management and e-discovery fees, etc."

"If there is no recovery, the client owes nothing," Younger said.

Despite the financial risk, Younger argued that the option to litigate remained an "important tool" for investors to be effective stewards of institutional capital."

"It is an activity that requires commitment and understanding, but for our fund, we do not believe this is overly onerous, relative to the value received by us and the wider community of investors in any given case," he added.

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