Investors in Woodford Equity Income Fund (Weif) could be forgiven for thinking that any progress feels like one-step-forwards and two-steps-back.
The latest update from campaign group ShareSoc, dated 11 January, revealed that a group litigation order (GLO) requested by law firms Leigh Day and Harcus Parker was denied. This would have involved selecting representative test cases for a group of legal claims raising similar issues.
In a decision made shortly before Christmas, the judge instead opted to proceed with bespoke case management by the court, as requested by the target of the legal action, Link Fund Solutions, which was Weif’s authorised corporate director (ACD).
A spokesperson for Leigh Day told Portfolio Adviser: “Following the hearing of Leigh Day and Harcus Parker’s clients’ application for a group litigation order in December 2022, the judge has ordered some joint case management of the claims brought by the Leigh Day and Harcus Parker claimants, and our firms are continuing to work together to seek the best outcome for our clients.”
On 16 January 2023, Leigh Day formally served proceedings on Link.
“The next steps will be for Leigh Day and Harcus Parker to jointly file and serve a generic particulars of claim, setting out the common arguments made on behalf of Leigh Day and Harcus Parker’s clients, in February, and then for Link Fund Solutions to file and serve its defence arguments in early May 2023,” the spokesperson added.
In a regulatory update on Tuesday, Link Fund Solution’s parent company, Link Group, acknowledged a group action served on its subsidiary by Leigh Day, which “will vigorously defend itself against these proceedings”.
An application for a GLO “was dismissed on 21 December 2022”, according to Link Group, which added that both law firms have until 18 January “to serve any claims issued against” Link Fund Solutions.
According to Link Group, Harcus Parker represents 1,918 claimants, while Leigh Day has 985. A third law firm, Wallace, represents 3,215 Woodford investors.
Twist in the tail
According to ShareSoc, the FCA’s proposed £50m fine on Link Fund Solutions and £306m redress scheme, which scuppered a proposed takeover of Link Group, have “added considerable complexity for affected investors”.
“It is not clear at this stage whether the FCA scheme will proceed, what criteria might be used for determining investors’ eligibility to claim redress under such scheme, or the mechanism for determining loss.
“It is also unclear whether partial compensation under the FCA scheme—which is significantly smaller than the potential private redress claims—will be conditional on claimants accepting any payments as full and final settlement.”