Let's go to court, say Neil Woodford's lawyers (2023)

One of five companies seeking compensation for investors who lost money in the dissolution of investment fund Woodford Equity Income is expected to file a multimillion-dollar class action in court by the end of the year.

The Mail on Sunday understands that litigation specialist Harcus Parker is likely to be the first to hit the 'go' button with a complaint against Link, the fund's authorized corporate director (ACD).

It is believed to be "further ahead" of rivals RGL Management, Nelsons, Slater and Gordon and Leigh Day.

Seeking justice: Many investors in Neil Woodford's fund were left with losses of up to 50 percent

Harcus' view is that Link failed in his duties as ACD to protect the interests of the fund's 300,000 investors, leading to the abrupt closure of the £3.5 billion fund last June when it was unable to comply with a refund request. a major investor.

Manager Neil Woodford was subsequently fired by Link, the fund was split up and most of the assets disposed of, with the money returned to the investors. But many investors were left with losses of up to 50%.


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Harcus alleges that Link failed to ensure there was sufficient liquidity in the fund to meet investor repayments, resulting in its sudden closure. In addition, it alleges that Link failed to verify the valuation of some of the fund's unlisted assets, which were later sold for a pittance after Woodford Equity Income spun off.

Finally, Link is accused of failing to ensure that Neil Woodford was managing the fund in line with his objectives – which was to provide investors with a combination of dividends and capital returns from a portfolio of UK-based companies. Instead, the fund invested heavily in privately held companies.

On Friday, Harcus confirmed he has the necessary funding to make his claim, got agreement from a senior Queen's Council on the merits of his claim and presented his case to Link in correspondence - a document The Mail on Sunday has .

It added: "The claim is still pending and we look forward to filing it on behalf of several thousand customers soon." Approximately 15,000 investors have expressed interest in backing the claim, of which 3,000 have become Harcus customers.

Their number will increase as Harcus pursues the claim – injured investors can hold out until the term set by the court (woodfordclaim.com). The action is performed with no income and no costs.

Harcus' decision will be welcomed by Woodford investors because the litigation specialist has a track record of successfully filing lawsuits. He sued Link's predecessor, Capita Financial Managers, over its role in the collapse of the Arch Cru funds - and allegedly forced Capita to settle out of court in 2015.

Interestingly, the advice of the Queen's Council sought in Link is the same as that of the lead attorney used in Arch Cru: Nick Vineall QC. Capita's roles in Arch Cru were basically the same as Link's roles in Woodford Equity Income.

Investors will have to be patient. Once launched, it would take at least 18 months for the class action to go to court. Be that as it may, it could take two to three months for a ruling to be made, so if Harcus is successful, it is unlikely that compensation will be paid before the end of 2022.

Aside from Harcus' intervention, the possibility of regulatory intervention in the Woodford disaster still exists.

The Financial Conduct Authority has spent the last 17 months investigating the circumstances surrounding the closure of the high-profile fund – and continues to do so.

According to Peter Sleep, fund manager at Seven Investment Management, investors expecting compensation through the FCA will probably have to have the "patience of a saint."

He says it took five years for the regulatory action against Capita Financial Managers (now Link) for its role in the liquidation of the Connaught Income Fund to surface.

The result was a £66 million payout to (Capita) investors who lost money in the bankrupt fund – plus public disapproval from Capita.

There are similarities between Connaught Income and Woodford Equity Income – in terms of the failure of the appropriate corporate director (Capita in Connaught's case, Link in Woodford's case) to adequately monitor the fund.

But as Sleep says, 'Nothing is exactly the same, but there could be other issues that the FCA uncovers with Woodford Equity Income. The wheels of justice turn slowly and I can only imagine Covid throwing sand on those wheels today.”

On Friday, the FCA said the investigation into Woodford Equity Income's suspension was a "priority issue".

He added: "There's a strong team working on this full-time and we're aiming to get it done as soon as possible."

He confirmed that Link was part of his job. While Harcus' focus is on Link, other lawsuits are targeting asset manager Hargreaves Lansdown, who until the day Woodford Equity Income closed promoted the fund as a 'best buy', generating millions of pounds in income for itself. .

This despite concerns about the increasingly illiquid nature of the fund.


Alan Miller, chief investment officer at asset manager SCM Direct, has been following closely the debacle for funds managed by Neil Woodford, left.

In fact, he was one of the first to predict that many of the investments in the Woodford Equity Income fund were grossly overvalued and virtually worthless.

He raised his concerns directly with the Financial Conduct Authority – and was proven right.

He says each class action has “a very high probability of success” – adding: “I think there will be substantial claims against Hargreaves Lansdown and Link, ironically not against Mr Woodford or his company Woodford Investment Management ”.

There is also the possibility of an institutional claim being filed against Link – backed by pension funds that have invested in Woodford Equity Income.

Harcus Parker investigates this, but it is complicated by the reluctance of many institutional investors to get involved in lawsuits they consider "messy and vulgar."

One expert believes Hargreaves Lansdown should join such a claim so that investors in the private label managed funds – some of which had invested heavily in Woodford – have a chance to recoup some of their losses.

On Friday, Link and Hargreaves Lansdown were asked to comment on the prospect of a lawsuit.

They turned down the opportunity.


RGL CONTROL:RGL's main target is Hargreaves Lansdown, although it is still "very seriously considering adding Link to the claim". Like Harcus, he asked the Queen's Council's opinion on the merits of each claim and the answer was "excellent".

James Hayward, CEO of RGL, said on Friday: 'We have over 1,000 applicants and that's before the start of a formal marketing campaign. In fact, we won't file a claim until next year.

Hayward admitted his company may not have been the first to file a complaint, but pointed to the fact that "no one has beaten them" to bring a class action lawsuit against the banks of Yorkshire and Clydesdale over the misselling of commercial loans in the 2000s have the experience and seriousness,” he added.rglmanagement.com/woodford-litigation

DAY OF THE LAW:Like Harcus Parker, Leigh Day believes that a case against Link is the best way forward. He told The Mail on Sunday that he is in the "final stages of preparation" before launching his case. Any action would be on a no-win, no-fee basis, with fees capped at 30 percent of the compensation received.

Kamran Vojdani, attorney at Leigh Day's consumer law team, said: “The time to prepare the case reflects the size, complexity and evolving nature of this case. In addition, we want to make sure that everything is in order to bring the claim to court, so that we don't have to let customers down later on.'

He added that he was "separately considering possible claims against Hargreaves Lansdown". consumer law claims.leighday. co.uk

NELSON:This company intends to file claims against Link and Hargreaves Lansdown – and advise some investors on additional claims against their independent financial advisers who recommended the Woodford fund to them. Partner Cathryn Selby said on Friday: 'We have gathered evidence for pending claims - and are also investigating possible new claims as affected people continue to come forward.

"We are in the process of finalizing claims, so anyone wishing to file a claim should act quickly as we expect to issue formal claim letters before the end of the year."nelsonslaw.co.uk/woodford-fund-claim

SLATER E GORDON:It follows RGL in pursuit of Hargreaves Lansdown. On Friday. Gareth Pope, lead attorney for Slater and Gordon, said: 'We believe the investors have a viable claim against Hargreaves Lansdown and we are committed to holding them accountable for the losses incurred by the investors.

"Slater and Gordon have formed a team of attorneys and expert advisors and are in the process of filing a class action lawsuit against Hargreaves Lansdown so that all investors can recover their investments and other losses incurred."slatergordon.co.uk

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