Non-compliant management of securities funds.

Supreme Court judgment 27 February 2020, HR-2020-475-A, (case no. 19-103417SIV-HRET), civil case, appeal against judgment. 

DNB Asset Management AS (Counsel Frode Andersen Innjord) v. The Norwegian Consumer Council (class representative) (Counsel Jens-Henrik Lien and Steinar Mageli)

Justices: Øie, Falkanger, Falch, Bergh, Steinsvik

In a class action brought by the Norwegian Consumer Council as class representative for 180 000 unitholders in three securities funds managed by DNB Asset Management AS, the Supreme Court found, like the Court of Appeal, that the unitholders were entitled to a reduction of the management fee. After an individual interpretation of the fund rules and other investor information, it was accepted that the management had not been accordance with the agreement entered into with the unitholders. The funds had not been managed in a way that gave the unitholders the financial risk exposure – and thus the possibility of outperformance of the benchmark index – for which they had paid. The conditions for a price reduction were met, although it was not possible to demonstrate a market price for the non-compliant management. The price reduction was set to 0.8 percent of the individual group member's invested capital. 

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