Leigh Day, the leading group action law firm, has today sent its Letter Before Action (LBA) to Link Fund Solutions Limited (Link), on behalf of over 4,000 clients. This is the first formal legal step in the group legal action on behalf of investors in the Woodford Equity Income Fund (WEIF) against Link (the authorised corporate director in charge of the fund).
The letter alleges that Link mismanaged the fund, and in particular it failed to maintain appropriate levels of liquid (meaning easily able to sell) assets for a fund of this kind.
The letter demonstrates that the failure of WEIF was not an event that occurred out of the blue. It had a long genesis and was avoidable, had Link done its job properly. Link now has three months to respond to this letter.
If, in response to this letter, Link does not agree to compensate investors, Leigh Day will issue court proceedings in the High Court on behalf of its clients, which could lead to a legal trial in which the various parties involved with the Woodford fund could be called to give evidence. Leigh Day has instructed Derrick Dale QC of Fountain Court and Teniola Onabanjo of 3VB as Counsel on this matter.
Leigh Day has secured adequate After the Event insurance and litigation funding in order to be able to take the claim through to a trial. Leigh Day is therefore in a position to issue court proceedings, without its clients facing a risk of having to personally meet Link’s costs.
Boz Michalowska on behalf of Leigh Day, commented:
“The thousands of people who invested in this fund were entitled to expect that their money was in safe hands and managed within the FCA rules. Sadly, this was not the case. Link failed to do their job and take the necessary steps to protect the interests of those that had invested in the WEIF.
"As a result, our clients have lost hard earned savings and pensions.
The LBA is the first formal step on behalf of 4,000 of our clients to recover those losses and hold those responsible to account”.
Leigh Day is receiving new instructions from investors who have lost out as a result of their investment in WEIF on a daily basis. It is understood that over 300,000 investors were affected by the fund’s collapse.
ShareSoc, the not-for-profit UK individual shareholder society, has endorsed the action proposed by Leigh Day and ShareSoc Chairman, Mark Northway, commented:
“It’s fantastic news that another critical milestone has been hit in Leigh Day’s legal claim against Link. We are delighted for Woodford WEIF investors and gratified that we have endorsed this claim.
“ShareSoc reviewed the various potential claims and concluded that the Leigh Day claim is well managed and is structured to maximise financial returns to investors. The Leigh Day Claim is also a key plank of the ShareSoc Woodford Campaign to improve regulation and hold wrongdoers to account.”
Leigh Day is also campaigning for better protections within the financial services sector for consumers. As part of this, Leigh Day has recently submitted evidence to the Treasury Select Committee’s inquiry into the Future of Financial Services. A separate update about this will be available on Leigh Day’s website in the coming days.5 March 2021