1 | Claims and questions continue in securities litigation

Securities litigation continues to loom large with several high-profile claims under section 90/90A of Financial Services and Markets Act 2000 (FSMA) continuing in the commercial and financial courts. Later in the year, we are due to see the first trial in Aabar Holdings Sarl and others’ claim against Glencore – a case that has so far generated two significant judgments on legal professional privilege1.

The English courts continue to grapple with how to effectively manage these claims, where issues of liability, reliance, causation and quantum can vary across a large and sometimes diverse claimant group. Whilst there is a trend for such claims to operate a split trial model, with questions of liability dealt with first and quantum later, recent decisions have emphasised that there is no “one size fits all” approach to how and when issues will be determined. By and large, there continues to be a tendency by claimants to seek to push off the “claimant-side issues” (reliance, causation and quantum) until the second trial, with defendants typically pressing for more of these issues to be dealt with alongside liability – to avoid the focus and costs of the first trial falling mostly on them.

In Boohoo2, the court sought to “cut through” the “tactical posturing by both sides” – rejecting an argument that the orthodox position in section 90A FSMA claims is for issues of reliance to be dealt with at a second trial. Instead, finding that the starting position should be that the parties should expect to have all aspects of the case (excluding quantum) decided at the first trial. Subsequently, in Entain3, the court took a different approach. Whilst largely endorsing the principles in Boohoo, the court ordered that all claimant-side issues of reliance, causation and quantum will be heard at a second trial – even though the first trial will not take place until 2029. The key factor driving the court's decision was the likely overlap in issues and evidence between reliance, causation and quantum.

Beyond issues of case management, following the settlement of the claim in Persons Identified in Schedule 1 v Standard Chartered Plc4 and related appeals, there remains an open question on the legal and evidential standard for reliance to be applied in section 90A FSMA claims. Last year’s Privy Council decision in Ivanishvili5 closes off the much more stringent approach taken in Allianz Funds Multi-Strategy Trust and ors v Barclays plc6, although it remains to be seen whether the permissive ‘fraud on the market’ approach taken in US class action securities claims will ultimately be accommodated under section 90A of FSMA in the UK.