Leigh Day and Harcus Parker join forces in group legal claim on behalf of Woodford investors

Leading law firms Leigh Day and Harcus Parker are now working together to seek justice for thousands of investors who lost money through the alleged mismanagement of the Woodford Equity Income Fund.

The law firms will today (Wednesday 15^th) file a joint application at the High Court for a Group Litigation Order (GLO) against Link Fund Solutions which managed the fund. The application details the claimants’ allegations against Link. The hearing of the application will be the first time Link or any other party appears in court in connection with the collapse of the fund. It is anticipated that the application will be heard in the High Court over two days in October.

Going forward, the collaboration will mean that Leigh Day and Harcus Parker share resources. This will avoid duplication and aims to meet the court’s overriding objective of dealing with cases proportionately in a way that saves expense. 

The court can appoint lead solicitors to manage the claims and it is proposed that this will be Leigh Day and Harcus Parker.

Link has denied that it breached any of the relevant rules and denies it has any liability to the Woodford investors.

Leigh Day solicitor Meriel Hodgson-Teall said:

“Hundreds of thousands of ordinary people have lost significant amounts of their life savings investing in this fund.  We contend this is a direct result of Link’s mismanagement.  Leigh Day is seeking redress for these investors, drawing on our strong track record of securing justice for individuals who have been wronged by large corporations.  Collaborating with Harcus Parker is the most effective and efficient way of securing justice and, by joining forces, we expect this will become the largest group claim on behalf of individual investors ever brought before the UK courts.”

Daniel Kerrigan, senior associate at Harcus Parker, said:

“We are pleased to be presenting a unified front on behalf of the claimants and we look forward to working with Leigh Day to deliver justice for our clients. We know that investors have been waiting for far too long for compensation and we are confident that working together we will deliver a positive resolution for our clients as soon as possible, starting with the first court hearing in this case in the Autumn. We invite all investors who have not signed up to the claim to do so.”

The claims are being brought under s.138D of the Financial Services and Markets Act (FSMA) which allows private individuals to claim compensation from a body authorised by the Financial Conduct Authority (FCA) if it breaches any of the FCA’s rules. 

It is alleged that Link breached the FCA’s rules in its performance as the Authorised Corporate Director of the Woodford Equity Income Fund and failed to ensure that the fund was managed in accordance with the Collective Investment Schemes sourcebook (COLL) of the FCA Handbook.

The allegations against Link are detailed in the draft Generic Particulars of Claim (GPOC) which have been lodged with the Court along with the application for a GLO.

The GPOC sets out:

• The financial management rules in place that Link allegedly breached
• The history of the Woodford fund, including the negative publicity received from at least late 2017 and the rising numbers of redemptions
• Alleged breaches of rules which include inappropriate levels of investment in illiquid, speculative or hard-to-value stocks; an inappropriate investment strategy; issues with the valuations of the fund’s assets; and untrue and misleading statements in the Prospectus.
• That the breaches caused the claimants to suffer loss, including in particular, loss resulting from the underperformance of the fund before it was suspended; loss from the suspension of the fund; loss from the overvaluation of the shares in the fund.
• That if Link had not breached the rules, the fund would not have been suspended in June 2019 and the claimants would not have been locked in. Then they could have redeemed their shares or could have continued to enjoy capital growth and/or earned income in a compliant fund. They would have received higher returns than they did receive.
• The calculation of compensation for claimants will be the subject of expert evidence in due course following disclosure by Link. It is anticipated that claimants’ losses will be assessed by examining the difference between the performance of the fund and the performance of the average of a group of comparable funds.

To date Leigh Day has issued claims for over 1,000 clients, and will be issuing further claims as soon as they have completed a review of other clients’ documents to establish their eligibility to join the claim. Harcus Parker has issued a claim for 1,500 people and will add more claimants in batches in the near future.

Leigh Day and Harcus Parker are continuing to receive new instructions from investors who have lost out as a result of their investment in WEIF on a daily basis.  It is understood that up to 300,000 investors may have been affected by the fund’s collapse.