Anyone else taking action against Woodford Equity Income Fund?

zagfles

bowlhead99 said:

dllive said:

dunstonh said:

dllive said:

Since then Ive been blocked from selling, so any income Ive received since than have been the distributions Link made.

So do I still have a claim? 

Claim is the wrong word as no failure resulting in liability has yet to be identified.   As it stands, no you do not.   However, that may or may not change in the future.

So I shouldn't bother registering with https://www.leighday.co.uk/Product-safety-and-consumer-law/Consumer-law/Woodford-group-claim  ?

dunstonh is correct that as yet there is nothing to 'claim' on, because nobody has been identified to pay out on such 'claims' that people lost money. 

However, Leigh Day among others intend to take Link to court on behalf of some investors, and argue among other things that Link's actions or inactions vs their requirement to follow the prospectus or the FCA sourcebook have ultimately resulted in the investors of the fund (such as yourself in respect of the fund shares you still hold), losing money as a result of the redemption activity which was followed by a liquidation where the fund had to sell the assets for whatever they could get for them and return cash to all investors, rather than being able to continue in business maintaining a portfolio of suitable and allowable investments that could ultimately be sold for a profit or for lower losses.

Leigh Day are happy to argue this because by taking their chances on incurring costs to source aggrieved investors and spending time and effort in court, they and their insurers and financiers could split 30% of any compensation that they successfully obtain for the investors who lost money after holding the fund as it went into liquidation.

As LD intend to arrange for someone other than the investors to bear the costs of their potential failure to win the case (including the exposure to Link claiming their own legal costs to fight it), it seems that the conditional fee arrangement means you only hand over a chunk of your 'winnings' if you win, and don't pay a legal fee if you lose. I have not attempted to sign up for the service, so don't know if the small print means that in the event of failure you are liable for the insurance premium for the insurance they buy on your behalf that would cover Link's costs when Link win. They do explicitly say it would be covered within the 30% of your winnings if they succeed and you get some winnings.

If it's truly 'no win no cost' for an aggrieved investor, rather than simply 'no win no fee' - or any insurance premium costs are nominal - you would not do yourself any financial damage if you sign up to their service and they lose their case (presuming you don't already have a case in with FOS or another law firm in respect of the same shares).

Assuming that the insurance guaranteed 100% of the costs, and that it didn't fail in any way (eg was conditional on something happening, being done right etc which wasn't).

Also what of the "financial damage" if the case succeeds? 30% of the "winnings". Surely if the case were to succeed, then anyone who hadn't signed up would simply be able to go to the FOS for free, with a slam dunk win since the legal argument has already been won by others in exactly the same boat. I suppose they might be further back in the queue if the money runs out...

dllive

Assuming that the insurance guaranteed 100% of the costs, and that it didn't fail in any way (eg was conditional on something happening, being done right etc which wasn't). 

Also what of the "financial damage" if the case succeeds? 30% of the "winnings". Surely if the case were to succeed, then anyone who hadn't signed up would simply be able to go to the FOS for free, with a slam dunk win since the legal argument has already been won by others in exactly the same boat. I suppose they might be further back in the queue if the money runs out...

I read their T&Cs after I initially registered with LD. Theyve done their best to reduce the legalese and make it intelligible to the lay person. But even so, theres 20+ pages to go through!!
From what I could tell, everything (insurance etc) is included withing the 30% recovery. If there are any insurance exemptions or fees that are not covered in the '30%' then theyve done a very good  job of burying it! Has noone on this forum read their T&Cs?

Regards waiting to see if the claim is successful and then going via FOS for free, this would also be an option I guess. But I presume it would take a lot longer to receive any money. And theres a chance of Link going kerput beforehand. (although I think that would be unlikely).

alig1

I registered a complaint with the Financial Ombudsman against H&L appx 6 months ago and they are only now setting up a dedicated team to deal with complaints.    I had expressed interest in the Leigh Day class action and am now being asked to register but cannot as I have an outstanding complaint with the FOS.   Confusedly, the FOS are asking if I am part of a class action despite the two strands appearing to be mutually exclusive.   Am I missing something?
Also, can anyone advise why all actions are related to the Equity fund when Woodford's Patient Capital suffered even greater losses

dllive

alig1 said:

I had expressed interest in the Leigh Day class action and am now being asked to register...

After reading their T&Cs, did you come to the same conclusion as me? (IE: that there would be absolutely no fees above and beyond the 30% recovered from any capital)

bowlhead99

alig1 said:

Also, can anyone advise why all actions are related to the Equity fund when Woodford's Patient Capital suffered even greater losses

The Equity Income fund's authorised corporate director may come under some fire for the various things that the law firm alleges, which include mismanagement of its liquidity (allowing a high concentration of illiquid, non-traded assets while continuing to provide redemptions) which ultimately led to it being closed down; having sacked the portfolio manager, investors' funds were then trapped in a liquidating investment which may have been administered in something other than the best way to maximise value from the portfolio.  The law firm alleges that the Link did not meet its requirements under the FCA's regulations and investors lost out with no way back.

The Patient Capital Trust simply lost money through poor investment choices, and perhaps lost some more value as a consequence of its manager quitting. Investors in it are not forced to sell and can simply hold on in the hope of getting their money back in some years / decades from now. But such investors in shares of that closed ended investment company are likely to be on a hiding to nothing if they try to sue somebody for the fact that they made a personal choice to buy equity shares in an investment company whose net asset value reduced over time. They will have heard the old adage 'investments can go down as well as up', and nobody is going to bail them out for making a personal decision to invest in a high risk investment trust which underperformed and is still operating, albeit now under a different name. 

k12479

zagfles said:
Surely if the case were to succeed, then anyone who hadn't signed up would simply be able to go to the FOS for free, with a slam dunk win since the legal argument has already been won by others in exactly the same boat.

That assumes it gets to court and is ruled on. As I understand it from a different case, if a settlement is reached between the parties, then those who aren't part of the action would not be able to benefit from it, payout or argument-wise.

dunstonh

 Confusedly, the FOS are asking if I am part of a class action despite the two strands appearing to be mutually exclusive. 

No confusion there.  The FOS are not allowed to get involved if you are taking legal action.

zagfles

k12479 said:

zagfles said:
Surely if the case were to succeed, then anyone who hadn't signed up would simply be able to go to the FOS for free, with a slam dunk win since the legal argument has already been won by others in exactly the same boat.

That assumes it gets to court and is ruled on. As I understand it from a different case, if a settlement is reached between the parties, then those who aren't part of the action would not be able to benefit from it, payout or argument-wise.

Which case were you thinking of? If they do "roll over" out of court, why would they not for anyone else who put in a claim? "Pay me what you paid them or I'll take legal action like they did". I suppose they could try to keep the settlement amount secret, but I doubt that would work with hundreds or thousands of people in the claim.

bowlhead99

zagfles said:

k12479 said:

zagfles said:
Surely if the case were to succeed, then anyone who hadn't signed up would simply be able to go to the FOS for free, with a slam dunk win since the legal argument has already been won by others in exactly the same boat.

That assumes it gets to court and is ruled on. As I understand it from a different case, if a settlement is reached between the parties, then those who aren't part of the action would not be able to benefit from it, payout or argument-wise.

Which case were you thinking of? If they do "roll over" out of court, why would they not for anyone else who put in a claim? "Pay me what you paid them or I'll take legal action like they did". I suppose they could try to keep the settlement amount secret, but I doubt that would work with hundreds or thousands of people in the claim.

People settle pending court cases without prejudice / without admission of guilt, all the time. For example: a law firm has a case to claim £2m on behalf of a thousand 'victims' in a class action, where they want £2000 each. But the case might go either way, resulting in £0 or £2m. The law firm says  to the defending company, how about you give me £1m and we forget it.  The company says no, I'm not guilty, but I suppose I don't want the hassle of being dragged through the courts on behalf of your 1000 aggrieved customers and if I get a bad judge I might need to give you £2m..., how about I just give you £999,900 without any admission of guilt, and you drop the case? The lawyers say sure, that's almost a grand each for our clients, best we could do and better than nothing, we'll just take our 30% fee and give our clients £699.93 each after fees, and then we don't need to waste a few days in court, which will save us hundreds of thousands of pounds-worth of effort.

Then an individual who wasn't part of the class action calls the company. "Hey, I heard you rolled over and paid out for that case where you were clearly in the wrong? Please send me £2000". The company says no, we're not guilty and are not going to pay you £2000. So, eff off. We're not even going to pay you £1000, because it would send the wrong signals to other chancers. But feel free to spend £20,000- £200,000 appointing lawyers to have a go at claiming your £2000. 

Disappointed with that response, the individual emails them back: "OK, I don't want to waste my money on lawyers, but clearly I would win in court as I have the moral high ground as you caved before.  How about you just send me £699.93 in a brown envelope. I understand some other people got that. It should be a slam dunk". The company says no, we're not guilty of anything. Why would we give you money? We'll settle for £0.00, how's that? Now please eff off.

Disappointed with that response and realising it's not worth spending thousands on lawyers, the investor has a brainwave. Of course! The Ombudsman would be on my side! Especially now the company has been defeated by lawyers and paid out. He asks the Ombudsman. The ombudsman says there is absolutely no precedent as the case didn't go to court last time, no judgement has been made. It's six of one and half a dozen of the other. Complaint isn't upheld.

k12479

zagfles said:
Which case were you thinking of? If they do "roll over" out of court, why would they not for anyone else who put in a claim? "Pay me what you paid them or I'll take legal action like they did". I suppose they could try to keep the settlement amount secret, but I doubt that would work with hundreds or thousands of people in the claim. 

I can't remember, I wasn't involved in any way. Otherwise pretty much as @bowlhead99 says.

You'd expect most settlements to contain, as mentioned above, no admission of guilt but also confidentiality. The settlement amount is not the issue, the detailed legal arguments made would remain confidential (including from those signed up to the group) so all you could take from it is: "But look, those people got a payout!", which is obviously not a strong basis for your own legal action.

[Bear in mind I'm not a legal-type so someone more qualified will hopefully correct, if necessary]