Hope for trapped Woodford investors as court case begins

Claims are estimated to be in excess of £100m


The first court hearing in the claim being brought on behalf of investors stranded in Neil Woodford’s (pictured) failed Equity Income Fund (Weif) is scheduled to take place on Monday 19 and Tuesday 20 of December.

The hearing, which will be in the High Court in London, will consider an application made by law firms Leigh Day and Harcus Parker, on behalf of Weif investors, asking the court to make orders regarding the case management of the claims.

The solicitors want the claims against Link Fund Solutions (LFS) to be managed together in a single set of proceedings, under a group litigation order. Meriel Hodgson-Teall, senior associate at Leigh Day, said actively managing the claims in this way order would ensure that they are progressed “as fairly and efficiently as possible to a resolution”.

Leigh Day and Harcus Parker would also like to be jointly appointed as the lead solicitors, with primary conduct of the common aspects of the claims on behalf of all the investors.

Leigh Day currently represents over 13,000 investors in the fund, and the claims are estimated in excess of £100m.

The solicitors are also pushing to set deadlines for the parties to file their pleadings, for investors to join the group claim, and to establish a register of claimants.

At its zenith, Weif held around £10bn in investor assets, a figure that had dwindled considerably to around £3.5bn by the time it was gated in June 2019. Trapped investors have watched in horror as the value of the holdings shrivelled. Between 15 June and 30 September 2022, the fund’s value dropped from £118.6m to £79.9m, with many investors losing a considerable sum of money despite capital distribution payments.

In September, the FCA mandated that LFS pay a £306m redress charge to trapped investors, and slapped it with a £50m fine over its failure to manage the fund adequately. This proved to be an insurmountable barrier for a takeover of the wider Link Group by Canadian firm Dye & Durham.

In a statement, Leigh Day said that LFS is opposing the case management proposals, and continues to deny that it has any liability to investors.

Hodgson-Teall argued that the hearing is an important step forward in the claims being made on behalf of Weif investors, yet if the case continues all the way to a trial, it could be a number of years before a final resolution is reached.

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