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UK-mooted Woodford fund redress too paltry, claimant lawyers say

UK-mooted Woodford fund redress too paltry, claimant lawyers say

Reuters · 09/13/2022 12:00
UK-mooted Woodford fund redress too paltry, claimant lawyers say

By Kirstin Ridley

- Claimant groups planning multi-million pound lawsuits over a collapsed fund run by former star stock picker Neil Woodford said on Tuesday any redress of around 306 million pounds ($359 million) ordered by Britain's regulator would be too paltry.

Law firm Leigh Day, which represents around 13,000 clients in a lawsuit against Link Fund Solutions (LFS), the administrator of the flagship LF Woodford Equity Income Fund, said the figure was " enough" to compensate thousands who had suffered financial losses.

"Leigh Day calculates that if all of the individuals who suffered losses as a result of investing in this fund signed up to the claims proceeding through the courts, the court claims could be in the billions," lawyer Meriel Hodgson-Teall said.

LFS has said it would vigorously defend itself against any proceedings and denies wrongdoing.

Prompted by a planned takeover of LFS to lay out its thoughts, the FCA said on Monday it was considering ordering LFS to pay up to 306 million pounds in redress or penalty because of failures in managing the liquidity of the fund. But its inquiry continues and LFS can challenge any final warning .

Woodford was once one of Britain's most high profile investors. But he was sacked and his 3.7 billion pound WEIF fund was suspended by LFS in 2019 after he was criticised for holding a large of hard-to-sell illiquid assets and struggled to meet redemption requests after months of underperformance.

The move trapped around 300,000 investors - and sparked an investigation by the UK Financial Conduct Authority (FCA).

RGL Management, a claims company also considering a lawsuit, said any redress of around 1,000 pounds per investor was "very significantly below" what it believed to be an average claim.

Law firms Leigh Day and Harcus Parker, which has around 7,000 claimants, are hoping to be formally appointed as joint lead lawyers to manage group claims against LFS at a court hearing in December.

Investors who accept redress through any FCA-ordered scheme are unlikely to also be able to take part in court proceedings, lawyers say.

($1 = 0.8527 pounds)


(Additional reporting by Carolyn Cohn; Editing by Emelia Sithole-Matarise)

((kirstin.ridley@thomsonreuters.com; +44 (0) 207 513 5666;))