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Investors Launch £100m Group Action Claim Against WEIF

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A group of private investors have recently commenced legal action against the failed Woodford Equity Income Fund (WEIF), seeking to recover losses sustained following the fund’s collapse in 2019.

The group action claim is being made by RGL Management and focusses on losses sustained directly as a result of the collapse of the WEIF and also for “loss of opportunity” losses, suffered as a result of missing out on alternative investments that, in contrast to the WEIF, would have generated positive returns. The RGL claim is being made against Link Fund Solutions and Hargreaves Lansdown Asset Management.

In an increasingly competitive market for claimant group action representation, RGL state that investors who join the claim will be offered the best value and financial return compared with any equivalent rival claims. Upon success, RGL will deduct 25% of damages inclusive of VAT, an amount that is significantly less than other firms competing to build claimant groups. In comparison, law firms Leigh Day will deduct 30% and Harcus Parker 42%, both inclusive of VAT.

WEIF collapsed in June 2019 after being unable to meet investor redemption requests, resulting in billions of pounds of investor losses. Since October 2019, the fund has been in the process of being wound-up. Link Fund Solutions was the Authorised Corporate Director (ACD) of the collapsed fund. As a result, RGL claims it had a legal obligation to ensure the fund operated in accordance with how it was promoted and sold to investors, as well as ensuring the ongoing liquidity and diversity of the fund. The claim against Link will relate to its alleged failure to appropriately administer and manage the WEIF. Letters Before Action (LBAs) have recently been sent to both Link and Hargreaves Lansdowne.

City analysts think that over 300,000 investors have been left stranded in the WEIF. Anyone who invested in the WEIF can register their interest with the RGL Group, irrespective of the amount invested. The RGL action has already registered more than 2,000 investors with numbers growing by the day, and the total value of this claim is expected to be well in excess of £100m.

RGL has instructed commercial law firm Wallace to act on behalf of claimants. RGL also has Alain Choo-Choy QC of One Essex Court Chambers acting as counsel and are currently putting together a litigation funding package and after the event (ATE) insurance to protect claimants against adverse costs should the claim be unsuccessful. In commenting on the claim, an RGL spokesperson said:

RGL has extensive expertise in building large and complex legal actions and our legal team has built a very strong case against both parties. We are very confident in the merit of our claims… We urge anybody who invested in the WEIF, no matter how little, to visit our website and register with us at no financial risk to recover the compensation they are owed.”

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