Leigh Day is preparing to do battle in the High Court with Link Fund Solutions after the authorised corporate director refused to compensate its clients who were burned by the collapse of the Woodford Equity Income fund.
Link has responded to a letter before action (LBA) sent by Leigh Day in March which accuses the ACD of mismanaging the fund and failing to maintain appropriate levels of liquid assets “for a fund of this kind”.
In a 40-page response sent by Link’s lawyers Clifford Chance the gatekeeper of Neil Woodford’s former fund makes clear it will be “vigorously defending” the claim, according to Boz Michalowska, head of product safety and consumer law at Leigh Day.
Because Link has refused to compensate investors Leigh Day will take the next step which is to issue proceedings in the High Court on behalf of its 7,000 clients. This could lead to a legal trial in which the various parties involved with Woodford’s defunct fund are called to give evidence.
Leigh Day said it was “well placed” to take Link to court having already secured after the event insurance and litigation funding, meaning its clients will not be on the hook for the defendants costs in the event the claim is unsuccessful.
It has instructed Derrick Dale QC of Fountain Court and Teniola Onabanjo of 3VB as counsel on this matter.
“We have already provided Clifford Chance with details of 7,000 of our clients and we will now prepare for the issue of formal court proceedings,” Michalowska said.
“Given the recent update from the Financial Conduct Authority (FCA) into its own investigation into the matter, we believe that the quickest way for investors to be compensated for their losses is through the group claim.”
Leigh Day’s legal challenge against Link for its alleged failings in the Woodford saga has continued gathering steam. When Portfolio Adviser spoke to the law firm back in February it was representing 4,500 clients and had just been endorsed by UK shareholder society, Sharesoc.
It is the second firm to issue court proceedings against the ACD over its handling of the Woodford saga. Harcus Parker sent Link an LBA in July 2020 on behalf of its 6,500 clients and has already received Link’s reply.
Though the London litigator told Portfolio Adviser it was hoping to launch a case before the summer there has been no update as of yet.
In March RGL Management launched formal proceedings against Hargreaves Lansdown for its continued cheerleading of Woodford’s fund. It is simultaneously pursuing a claim against Link for its role in the fund’s demise.