The first section 90A/Schedule 10A Financial Services and Markets Act 2000 (“FSMA”) group securities claim to reach trial has settled just over a week into the hearing.

Commercial Litigation partner Lorraine Lanceley and associate Francesca Bugg review the claim and the broader significance of the settlement.



Securities litigators were poised last week for the start of the first trial of a securities claim brought by a group of institutional investors pursuant to s90A/Schedule 10A of FSMA. The case against Serco Group plc (“Serco”) (which was originally issued back in July 2019) commenced on 10 June 2024 before Mr Justice Trower in the Commercial Court. The trial was due to last five weeks.

The Serco judgment was set to be the first authority on a number of key issues arising in securities claims. While the Autonomy case (ACL Netherlands BV & Ors v Lynch & Ors [2022]) was technically the first time the merits of a claim under s90A/Schedule 10A FSMA had been fully tried, the case is an outlier in that it represents a unique use of s90A/Schedule 10A FSMA for a merger and acquisition transaction gone wrong as opposed to the normal multi-shareholder claims in relation to misstatements to the markets. See our previous article for more.

The court had previously ordered a split trial (Various Claimants v Serco Group plc [2023] EWHC 119 (Ch)), with “trial 1” due to consider the legal standing of the claimants as well as common issues relating to Serco. Several other securities claims have been issued over the past decade since the first FSMA claim against RBS in 2013 (Trustees of the Mineworkers’ Pension Scheme Limited & Ors v The Royal Bank of Scotland Group PLC) but until Serco, none had made it as far as trial before settling.

After only three days in court, the trial was adjourned. A few days later, lawyers for the parties informed the court that an agreement had been reached. The terms of the settlement are confidential.


The claim against Serco

The claim stems from a 2013 scandal in which Serco, a major public services provider, was accused of overcharging the UK government for the delivery of electronic tagging and prisoner escort services. The company’s share price fell significantly when news of Serco’s misdemeanours became public. Serco agreed to repay the UK government £68.5m, but the matter was referred to the Serious Fraud Office, which fined Serco £19.2m as part of a deferred prosecution agreement.

The claimants, institutional investors that invested in Serco during the relevant period, initiated proceedings against the company pursuant to s90A/Schedule 10A FSMA. They sought to recover losses suffered due to the drop in Serco’s share price.

Given the nature of a split trial, most claimant issues (reliance, causation, loss and quantum, and limitation) were not due to be considered by the court this summer at the “trial 1” stage. Notwithstanding that, “trial 1” still represented a landmark moment for securities litigation, given the prospect (at long last) of some judicial authority on key topics such as dishonest delay and persons discharging managerial responsibilities (PDMR) knowledge.


The future

As to the future, it seems securities litigators will have to continue to be patient while they wait for one of the increasing number of securities claims working their way through the English courts to reach trial (and result in a judgment). A couple of securities trials are looming in the distance, but these are still a fair way off, with both Standard Chartered [FL-2020-000038] and Glencore [FL-2022-000024] having recently been listed for trial in autumn 2026. In the meantime, securities lawyers eager to see the case law develop in this burgeoning area will have to sit tight.



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