The High Court has handed down a judgment on consequential matters in the Autonomy litigation ([2026] EWHC 691 (Ch)) following Mr Justice Hildyard’s judgments on liability ([2022] EWHC 1178 (Ch)) and quantum ([2025] EWHC 1877 (Ch)). The judgment follows a four-day consequentials hearing in November 2025, as well as further submissions in November and December 2025.

The judgment provides guidance on a number of important matters for parties to claims under Section 90A and Schedule 10A of the Financial Services and Markets Act 2000 (FSMA), including forex fluctuation where the loss has not been incurred in sterling, credit being given for related settlement amounts and other interest and costs issues. The judgment also deals with the permission to appeal application made by the estate of Mike Lynch, a defendant in the litigation.

Background

In 2022, the High Court handed down a liability judgment in the Autonomy litigation (as we reported here). The claim centred on HP’s 2012 acquisition of Autonomy, following which HP announced a considerable write-down in the value of Autonomy attributed to alleged accounting improprieties and disclosure failures. HP set up a special-purpose vehicle for the acquisition called HP BidCo. The main claim was under s.90A/Schedule 10A of FSMA and had a ‘dog-leg’ nature:

• HP BidCo sued Autonomy (as the issuer) under s.90A/Schedule 10A, and
• Autonomy (having admitted full liability in September 2014) sued the defendants, Michael Lynch (ex-CEO) (the First Defendant) and Sushovan Hussain (ex-CFO) (the Second Defendant), for any liability for damages under HP BidCo’s claim against it.

In 2025, the estate of Mike Lynch was ordered to pay approximately £650 million to HP (the claim against Sushovan Hussain having settled) (see our article on the quantum judgment here).

The consequentials judgment deals with matters arising out of the liability and quantum judgments. While the ‘dog-leg’ nature of the claim makes it a somewhat anomalous s.90A/Schedule 10A claim (as most are brought as group actions by minority shareholders), the findings in the consequentials judgment are of general relevance to parties to s.90A/Schedule 10A FSMA claims.

The currency issue

In the quantum judgment, Mr Justice Hildyard calculated HP BidCo’s loss as a sterling amount to be £646,178,248. After applying the foreign exchange rate of $1.554 agreed between the parties (ie, to convert the sum into US dollars), Bidco’s loss was estimated to be $1,004,160,997. The first consequential issue related to the quantification of the liability on the second part of the ‘dog leg’ claim by Autonomy against the estate of Mike Lynch, namely, whether liability should be assessed with reference to the foreign exchange rate as at the date of judgment, or the applicable rate should be as of when Autonomy admitted liability (September 2014).

The claimants argued that liability to HP BidCo crystallised upon judgment and that they should be compensated in US dollars at that point. The First Defendant, on the other hand, contended that its liability crystallised as of the date of admission, on the basis that the second part of the ‘dog leg’ claim was similar to a claim of indemnity and the risk of currency fluctuations following that date should be borne by the claimants.

The court held for the claimants saying: “Although in effect similar to a claim for indemnity, the second claim is nevertheless a claim for breach of duty (whether in equity or under the common law) and until determined by judgment it has remained the contingent obligation and duty of the First Defendant to cover the actual expense to Autonomy of doing so, including the expense of acquiring sufficient dollars out of sterling (as its functional currency).”

Credits to be given

The second consequential issue concerned whether credit should be given (and if so, how much) for the sums recovered by the claimants further to the related settlement of their claims, including with the Second Defendant. The claimants accepted that, in principle, they should give credit, but a dispute remained as to (a) the apportionment/allocation of such sums and (b) what deductions the claimants were entitled to make to cover, for example, costs and tax.

The dispute centred on the deductions the claimants could make for legal costs. Adopting a “broad-brush” approach, Mr Justice Hildyard reduced the claimants’ proposed costs deductions. The judge disallowed fees for a US law firm, finding insufficient justification for instructing US lawyers in English proceedings involving no element of US law. He substantially reduced the deductions claimed for PwC’s fees, including due to the likely overlap with work done for the main proceedings.

The pre-judgment interest on losses

This issue related to the fraudulent misrepresentation claim in the litigation, and specifically the type of interest to be awarded on damages in relation to that claim. In relation to FSMA claims, the court’s statutory jurisdiction is to award simple interest on damages under section 35A of the Senior Courts Act 1981. With fraudulent misrepresentation claims, however, claimants can contend that compound interest should be awarded under the court’s equitable jurisdiction.

The High Court rejected the claimants’ argument that they should be awarded compound interest in respect of the misrepresentation claim. Mr Justice Hildyard noted that the misrepresentation claim is for damages for a bad bargain induced by fraud, not restitution of a fund, and is therefore not an equitable claim giving rise to compound interest. Consequently, only simple interest under section 35A of the Senior Courts Act 1981 was to be awarded.

Costs

A number of issues relating to costs were considered in Mr Justice Hildyard’s judgment, particularly the recoverability of fees incurred by the claimants’ US lawyers and the foreign exchange risk arising out of invoices to the claimants issued in US dollars. While fundamentally matters for the costs judge, the High Court provided guidance on those issues.

Regarding the fees incurred by the claimants’ US lawyers, who had an intermediary role between the claimants and their English lawyers, relevant considerations were that 1) their fees were not disclosed in the cost reports filed by the parties, and 2) the claimants already had a large English legal team. On that basis, while the High Court did not disallow these costs, it expressed doubts as to their recoverability as the judge did not “consider it right to oblige the First Defendant to contribute to the undisclosed costs”. The court added that the costs judge will need to be satisfied that the additional costs of further manpower were, at all material times, reasonable and proportionate.

The foreign exchange risk point arose because of the claimants’ US lawyers’ role as intermediaries in the litigation. The claimants’ English lawyers issued their invoices in sterling, which were in turn added to the US lawyers’ invoices, denominated in US dollars, as a disbursement. The US lawyers’ invoices included substantial transaction exchange rate costs and were paid by the claimants in US dollars. Mr Justice Hildyard held that costs must be awarded in sterling, applying the Supreme Court’s recent guidance in Process & Industrial Development Limited v The Federal Republic of Nigeria [2025] UKSC 36 that an award of costs “is no indemnity” but rather “a statutorily authorised award of a contribution” towards costs incurred. The court should therefore not need to decide what currency truly reflects the loss suffered by the receiving party. On that basis, the High Court disallowed any currency conversion costs related to fees originally denominated in sterling.

Permission to appeal

The High Court’s judgment also dealt with the First Defendant’s application for permission to appeal on four grounds related to the liability and quantum judgments. The first ground related to the court’s liability finding that HP’s reliance could be attributed to HP BidCo. The second and third grounds related to the court’s counterfactual analysis in its quantum judgment, and specifically its findings on the counterfactual share price and counterfactual negotiation outcome/bid price. The fourth ground related to the currency issue discussed above.

The court refused permission to appeal on all grounds. The First Defendant subsequently applied for permission to appeal to the Court of Appeal (CA-2026-000914). As of the date of this article, no decision has been published by the Court of Appeal on whether permission will be granted.

Practical implications

There are a number of takeaways from the High Court’s judgment on the consequential matters set out above. Notably, and thinking beyond s.90A/Schedule 10A FSMA claims, the judgment provides important guidance on costs management in multi-jurisdictional disputes. Domestic legal teams must justify the instruction of foreign lawyers in English proceedings. Absent clear evidence that foreign counsel provided a distinct and necessary skill set not available within the domestic team, their fees are vulnerable to being disallowed on assessment. The failure to disclose such costs in costs reports will further undermine their recoverability.