Harry McGowan, Lorraine Lanceley and Elisa Wahnon comment in this article on the latest key development in the fast-evolving landscape of securities litigation in England and Wales.

On 25 March 2025, the High Court handed down its decision on whether or not to strike out and/or grant reverse summary judgment of certain claimants’ claims in Various Claimants v Standard Chartered PLC [2025] EWHC 698 (Ch). This was a hotly anticipated judgment as it was the first to follow Mr Justice Leech’s judgment in Allianz Funds Multi-Strategy Trust and ors v Barclays plc [2024] EWHC 2710 (Ch) in which he struck out all claims based on market/price reliance or dishonest delay.

The Barclays judgment made waves in the securities litigation sphere as it had the potential effect of preventing passive/index funds from making use of statutory investor protection (earlier commentary on the judgment is available here). Off the back of the Barclays judgment, a spate of strike-out applications were made by defendants in claims brought under section 90A/Schedule 10A Financial Services and Markets Act 2000 (“s90A FSMA Claims”). Standard Chartered was the first of those strike-out applications to be heard, and the judgment casts doubt on the Barclays decision.

The judge, Mr Justice Green, did not consider himself bound to follow Barclays and instead exercised his discretion to dismiss Standard Chartered’s application to strike out (i) the claims of 949 funds based on market/price reliance (referred to as the “Common Reliance Claims” in the judgment) representing 49% in value of the total claim, and (ii) the dishonest delay claim brought by every claimant (the “Delay Claims”).

Key points from Barclays

In Barclays, Mr Justice Leech held as follows:

• Reliance: the test parliament intended to apply for the “reliance” requirement in s90A FSMA Claims was the common law test for inducement or reliance in the tort of deceit. The common law test requires a claimant to prove that they read or were aware of at least the gist (possibly through their agent) of the representation and understood it in the sense in which it was alleged to be false and that it caused them to act in a way that caused them loss. Reliance solely on share price does not meet this test.
• Dishonest delay: paragraph 5 of Schedule 10A of FMSA only imposes liability on an issuer for dishonest delay if the issuer has later published the delayed information on a recognised exchange service or by recognised means.

Market/price reliance

It is worth noting that both the claimants and Standard Chartered agreed that the test for reliance in paragraph 3 of Schedule 10A of FSMA had to be the same for both misleading statements and omissions. However, they differed on the test to be applied (namely, whether market/price reliance was sufficient).

Key points made by the defendant:

• As a matter of judicial comity, Mr Justice Green was bound to follow Barclays unless convinced that the decision reached by Mr Justice Leech was wrong.
• The wording of paragraph 3 of Schedule 10A makes its meaning clear because it refers to reliance on published information (and not reliance on share price or status as a listed issuer).
• Mr Justice Leech was right to apply the common law test of reliance from the tort of deceit, which requires a representee to have read or heard the relevant statement or its gist for it to have operated on their mind (and that this accommodates indirect reliance).

Key points made by the claimants:

• The Common Reliance Claims were pleaded as indirect reliance based on a positive “belief” that the defendant’s published information was fair and accurate and that the price reflected this. They argued that this distinguished the case from Barclays, where there was no such plea.
• Mr Justice Leech was wrong to apply the common law test for reliance in the tort of deceit and was also wrong to conclude that the common law test required proof that representees read or heard express representations (as that made no sense for omissions).
• Instead, the correct common test for both omissions and misleading statements was the counterfactual of truth (“CFOT”) approach that Mr Justice Waksman held was arguable in Crossley v Volkswagen AG [2021] EWHC 3444 (QB). The CFOT looks at how a claimant would have acted if they had been told the truth.

Key points from Mr Justice Green’s response:

• Mr Justice Green did not think these points were suitable for summary judgment. He said: “It would be to ignore reality to suggest that this is not a live and possibly developing area of law.” The points raised were complex and “could have an impact on all reliance claims”.
• Mr Justice Green did not think it was clear where parliament had intended to draw the line on indirect reliance. For example, could it be said that there is no real difference between an investor who relies on a third party analyst’s recommendation (based on published information) and an investor who relies solely on price movement (which would also be influenced by that same information)?
• Mr Justice Green observed that “it is not beyond the realms of possibility that, as reliance is so bound up with inducement and causation, there could be a place for the CFOT test applying at least in relation to omissions.”
• In respect of the Barclays decision, Mr Justice Green said he was not convinced that Mr Justice Leech was wrong. However, he said he had his doubts as to whether he was right to say that the common law test for reliance was also intended to constitute the reliance requirement in s90A FSMA Claims. He said this was “mainly because of the curious case of omissions”. As such, it is arguable that a broader test for reliance is contemplated by paragraph 3 of Schedule 10A FSMA in order to accommodate such scenarios. He further noted the uncertain and developing law in relation to implied representations.
• In respect of judicial comity, Mr Justice Green said it was open to him as a matter of case management, but also in light of his uncertainty as to the correct answer to the legal question, to leave the issue to be determined at trial.

Dishonest delay

Key points made by the defendant:

• There is an overlap between dishonest delay and omission claims. Mr Justice Leech was correct to say that unless there was a later corrective publication, it would render the requirement to prove reliance in respect of omissions completely redundant.
• There is an important distinction between omission and delay claims by reference to the dishonesty that has to be proved. For omissions claims, the dishonesty is as to the contents of a publication, whereas for delay claims, the dishonesty has to relate to the delay or the timing of the publication.

Key points made by the claimants:

• To require later corrective disclosure is an arbitrary requirement that is quite separate from the dishonest delay that is said to have caused loss.

Key points from Mr Justice Green’s response:

• Mr Justice Green did not agree with Mr Justice Leech’s judgment on dishonest delay claims, commenting: “It also seems to me a little extraordinary that such an apparently straightforward condition of liability – that there has to have been a later corrective publication – was not clearly spelled out in Para. 5.”
• He noted: “As Mr Chapman KC pointed out, Professor Davies refers to the lacuna in the issuer liability regime as being where there is a ‘failure to make any statement at all’. It would be odd to fill that lacuna by making liability for that delay dependent on a later statement being made. That would not, in my view, be a way of addressing the mischief.”
• Mr Justice Green did not see how the imposition of a requirement to publish the correct information prevents the overlap between omission and delay claims. Any such requirement would provide a “perverse incentive” for an issuer not to publish the corrective information so as to avoid liability.
• In any event, he was less troubled by the potential overlap between omissions and dishonest delay, stating: “There is no particular vice in an overlap between [paragraphs 3 and 5] and it is not surprising that there is such an overlap given that dishonest delay claims were only inserted into the existing regime by amendment.”
• For the same reasons as in relation to the Common Reliance Claims, he refused the reverse summary judgment/strike-out application. However, he added that he has “more doubts about whether Leech J was correct to conclude that dishonest delay claims are dependent on the issuer publishing corrective information at some stage” and “whether it serves any useful purpose”.

Comment

Following a number of recent judgments in section 90/90A FSMA claims, which have arguably made it more difficult for certain investors to bring statutory securities claims (see Barclays and Reckitt/Indivior), the Standard Chartered judgment takes a more balanced and reasonable approach and is a welcome decision for investors. While Mr Justice Green does not go so far as to say that Barclays is wrong, he makes his (significant) reservations about the judgment clear.

The issues remain open to be decided at trial by reference to the established facts of the case, so there is still no binding decision on the scope of reliance or dishonest delay claims in s90A FSMA Claims. In the meantime, Standard Chartered makes clear that such novel and complex legal questions are not suitable to be decided at an interim stage in the proceedings.

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