The push by two British local authority pension funds to lead a US class-action lawsuit against GlaxoSmithKline reveals not just investor impatience with the poorly performing drugs company, but also a new pugnacity among some UK institutions.

The Avon and North Yorkshire funds want to sue the company for allegedly misrepresenting the prospects for its troubled diabetes pill, Avandia. It is sometimes right for pension trustees to go after compensation on behalf of their members, but there are costs to moving to US-style litigation. Shareholders who are still investors end up indirectly suing themselves. The proceeds are rarely divvied up fairly. The lawyers take a big chunk, sometimes as much as 20 per cent. Management is distracted. And we end up with a more confrontational, less trusting, relationship between owners and managers.

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