The long-awaited quantum judgment in the first ever section 90A / schedule 10A Financial Services and Markets Act 2000 (“FSMA”) claim to go to trial is expected imminently. Beata Brachkov and Elisa Wahnon review its significance.
In May 2022, the High Court handed down a lengthy liability judgment in ACL Netherlands B.V. (as Successor to Autonomy Corporation Ltd) v Michael Richard Lynch [2023] EWHC 1847 (Ch). A separate hearing on quantum was heard over eight days in February 2024. Judgment has been pending since.
The quantum judgment was delayed following the death of Mike Lynch, ex-CEO of Autonomy and one of the defendants in these proceedings, in the Bayesian superyacht tragedy in August 2024. Issues then arose in relation to the constitution of the proceedings, as Dr Lynch’s executors refused to take out any form of grant whilst the solvency of the estate remained uncertain.
On 14 May 2025, the High Court handed down a judgment seeking to resolve these issues. Former Clifford Chance global disputes head Jeremy Sandelson has now been appointed as the administrator of Dr Lynch’s estate for the limited purpose of representing the estate in these proceedings.
This judgment indicates that a draft quantum judgment should be in circulation (amongst the parties to the proceedings) shortly.
Background to the claim
Autonomy, an English FTSE 100 software company, was at the forefront of machine-learning software. Its core product, IDOL, was described as “almost magical”. In 2012, Autonomy was acquired by Hewlett-Packard (HP). Shortly after this, HP announced a considerable write-down in the value of Autonomy, which it attributed to alleged accounting improprieties and disclosure failures.
The main claim was under section 90A to and schedule 10A of FSMA, with the proceedings having a “dog leg nature” in that:
- Hewlett-Packard BV (BidCo) sued Autonomy (as the issuer) under s.90A/schedule 10A FSMA; and then
- Autonomy sued the defendants, Michael Lynch (ex-CEO) and Sushovan Hussain (ex-CFO), for any liability Autonomy incurred for damages as a result of the claim in (i). It was reported on 16 May 2025 that HP has agreed to settle its case against Sushovan Hussain.
In the May 2022 judgment, the claimants substantially succeeded in their claims, with the judge indicating that a decision on quantum would follow.
The judge did not feel able to determine the quantum of the claimants’ loss at that time, and following additional expert evidence that the defendants contended should be allowed, he gave directions for a quantum hearing. This took place over the course of eight days in February 2024.
Conclusion
To date, there have been no judicial decisions on quantum regarding s.90 and s.90A/schedule 10A FSMA cases, and it is clear that the quantum judgment in this case will be significant in setting the principles behind how the calculation of compensation should be applied in such cases.
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