Keith Thomas, Harry McGowan and Elisa Wahnon have contributed to the new Lexology Getting the Deal Through guide to Securities Litigation, covering the United Kingdom section.
Covering more than 120 work areas in 150 jurisdictions, with contributions from 6,400 experts in numerous specialist areas, Lexology Getting the Deal Through provides “local answers” to “global questions”. Other jurisdictions covered in the new Securities chapter include Brazil, Germany, Nigeria, Japan and the United States.
Read the guide in full here.
UK guide sections
The themes and issues discussed in the UK section of the new edition include:
- A general framework
- Claims and defences
- Remedies, pleading and evidence
- Liability
- Collective proceedings
- Funding and costs
- Investment funds and structured finance
- Cross-border issues
- Alternative dispute resolution
- Updates and trends
The climate of securities litigation in the UK
There has been a significant increase in the amount of securities litigation being pursued through the courts of England and Wales in the past few years and this trend shows no sign of abating. The law in this area is gradually developing as cases pass through the courts. The year 2022 saw the first trial judgment of a section 90A Financial Services and Markets Act 2000 case in Autonomy/Hewlett-Packard, which was not a typical shareholder group action. Judgments from interim applications in other cases, including the G4S Litigation and the RSA Litigation, have provided further guidance in this developing area of law. Even so, significant uncertainties remain.
The combined jurisdiction of England and Wales does not presently have a US-style opt-out class action system. The Supreme Court judgment in Lloyd v Google LLC [2021] UKSC 50 has brought into focus the limitations of the representative actions procedure for opt-out class actions. However, the procedures and practice for opt-in group actions are becoming more developed.
The courts of England and Wales have extensive experience in hearing financial disputes, given the importance of London as a financial centre. Securities actions are generally heard in the Financial List, which is a specialist cross-jurisdictional list that was set up to address the business needs of parties litigating on complex high-value financial matters. The Financial List sits within the English High Court.
The time it takes for a securities action to go from filing to trial largely depends on the value and complexity of the matter. A high-value and complex securities action with multiple claimants could take between three and five years from filing to trial.
In general, the regulatory bodies in the UK seek to penalise regulated firms and individuals for breaching regulations. By contrast, the damages awarded in private securities litigation in England and Wales seek to compensate the claimant for the losses suffered rather than punish the wrongdoer.
The Financial Conduct Authority (FCA) is an independent public body that regulates the financial services industry in the UK. FCA has a wide range of criminal, civil and regulatory enforcement powers that include issuing fines against firms who breach its rules and suspending firms from undertaking regulated activities. The fines usually go to the Treasury rather than to persons who suffered loss as a result of the wrongdoing.
FCA can bring prosecutions to tackle financial crime in the criminal courts. The Serious Fraud Office (SFO), a specialist prosecuting authority, tackles the most serious and complex cases of financial crime, bribery and corruption.
Decisions and findings of FCA and SFO are often used to support private securities litigation, and FCA can mandate compensation schemes for investors who have suffered losses.
You can find further information regarding our expertise, experience and team on our Securities Litigation pages.
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