Link Fund Solutions could be in court by the end of the year facing a multi-million pound class action over its oversight of the Woodford Equity Income fund of which it was the authorised corporate director.
Harcus Parker has received interest from 15,000 investors over its claim of which 3,000 have become clients, the Mail on Sunday reports. Further investors will be able to join the claim up until a date set by the court.
Harcus Parker confirmed it had the funding in place to launch a claim. In August, it sent Link a so-called pre-action letter, which is required in the UK to trigger the litigation process.
The litigator successfully pursued Link’s predecessor Capita over the collapse of the Arch Cru funds.
In the case of the Woodford Equity Income fund, Harcus argues Link did not ensure there was enough liquidity in the fund to meet investor redemptions, that it failed to verify the valuation of some of the fund’s unquoted assets, and that it failed to ensure Neil Woodford ran the fund in line with its objectives.
Harcus Parker told the Mail on Sunday it had obtained a favourable Queen’s Counsel opinion on the merits of the case against Link. Nick Vineall QC, who provided the opinion, had been the lead counsel in the Arch Cru case.
Harcus Parker is one of five law firms pursuing firms connected with the Woodford Equity Income fund but the Mail on Sunday said it was likely to be the first to end up in court.
In June, Nelsons became the first law firm to announce it was examining possible legal claims against Link over the former Woodford Equity Income fund, which has been renamed LF Equity Income during its wind down.
Slater and Gordon, which began examining a case against Hargreaves Lansdown for its Woodford cheerleading in October, has also extended its investigation to Link. It has already decided that Hargreaves has a case to answer for.
Leigh Day was the first law firm to launch an investigation into a potential class action involving Woodford Equity Income investors. It announced in October 2019 it would be focusing its attention on Hargreaves and received a stream of inquiries from disgruntled Hargreaves clients.
RGL Management and Wallace LLP are also working together on a case against Hargreaves, claiming the platform knew of liquidity issues in WEIF from November 2017 yet continued to promote the fund in its buy list.
If the Harcus Parker case is successful, investors are unlikely to see compensation before the end of 2022. The class action would take at least 18 months to get to trial and then a judgement could take between two to three months to be made.
Separately, the Financial Conduct Authority is currently investigating the suspension of Woodford Equity Income, including Link’s role.
See also: FCA accused of lacking bite as it fails to hold anyone to account for Woodford scandal
