The RGL Woodford Group Litigation against Hargreaves Lansdown so far comprises some 7,000 claimants with more being added every day. RGL has informed us that the average claimant had approximately £20,000 invested and that the average claim value (including the opportunity loss) is also in the region of £20,000.
133,000 Hargreaves clients had £1billion+ invested in Woodford Equity Income Fund (WEIF) at the point of suspension on 19th June 2019, so the potential value of the group claim is substantially larger than the current £140 million and could reach £1billion+.
The average Hargreaves customer in 2019 had c.£75,000 invested on the Hargreaves platform, suggesting that some 10% of affected clients’ portfolios may have been invested in WEIF.
The main concern is how to inform and mobilise the remaining 126,000 potential claimants. The action has been widely covered in the media, but take-up remains low despite the no-win-no-fee nature of the action.
The sums involved are significant, and the missing 126,000 Hargreaves Lansdown Woodford investors could miss out on recoveries averaging up to £7,000, assuming the case is won.
ShareSoc’s endorsement will help reach more potential claimants and should provide additional comfort to those considering joining the RGL Woodford Group Litigation. But it’s clear that the relevant information hasn’t yet reached many of the affected investors.
What is really needed is for Hargreaves Lansdown to write to all relevant customers to inform them of the RGL Woodford Group action. It’s the right thing for HL’s clients to be fully informed, and it would be a good start in demonstrating a desire on HL’s part to rebuild its tainted reputation.
Would it also help HL achieve the requirements of the FCA Consumer Duty?[1]
Footnote:
[1] The FCA Consumer Duty has 4 objectives:
- Fair value: Consumers pay a price for products and services that represents fair value and poor value products and services are removed from markets leading to fewer upheld complaints about poor value and unexpected fees or charges.
- Suitable products and services: Consumers are sold and receive products and services that have been designed to meet their needs, characteristics and objectives leading to a reduction in the number of upheld complaints about products and services not working as expected.
- Suitable treatment: Consumers receive good customer service leading to a reduction in upheld complaints about switching, cancellation and service levels and customers having higher levels of satisfaction with the service they receive.
- Confidence: Consumers increase their confidence in financial services markets and are equipped with the right information to make effective, timely and properly informed decisions about their products and services.
Post Date: December 13, 2024
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“take-up remains low despite the no-win-no-fee nature of the action”
This might have something to do with Leigh Day charging their “no-win-no-fee” clients a big fee for not winning anything.
Absolutely agree with Glenn. Sadly all trust is gone in these organisations
To my knowledge, Leigh Day have not sent an invoice to any of their clients yet. If there is no invoice, then why would anyone pay anything to Leigh Day? If anyone has received an invoice, please can you send me a copy by email?
Leigh Day have sent emails to their clients asking them how many shares they had in WEIF and what compensation award they have received. They also said they had received a legal opinion that they were entitled to payment for winning, ie the compensation award agree between Link and FCA which went to all investors. I have been told (ie heresy) the legal is phrased in the usual way and that the opinion whilst strong for those who joined the claim after Dec 2022, is less strong for those who joined earlier.
The RGL claim should be evaluated on its merits. RGL have a good history with Group claims and hopefully, when you review that, your trust will be restored, at least in respect of the RGL claim.
Leigh Day charged me £183 (30%) of £611 compensation. What’s the point going after HL!
I agree with Stuart-Out of £949 compensation I had to pay Leigh Day £285 (30%) Given that experience I have closed my file on Woodford and have no wish to pursue matters with any more solicitors -having had my hopes raised once is enough.
Talking about a large claim value is just a way of drumming up business – the likely outcome is that HL make a token offer without admitting liability and the lawyers accept it because they get their cut without having to actually engage in any litigation. That would still be better than nothing for the claimants but a lot less than they’re being led to expect.
Stephen, You make a number of very good points in your short post. However, first can I correct you. RGL have already seriously engaged with litigating against HL.
I would agree with you that RGL’s costs will be much less if they settle sooner than later. The claim value is building and the bigger the claim becomes the higher the cost that HL will have to concede in order to settle. I agree that it is highly likely that HL will make any offer without admitting liability.
At present only about 5,000 of the 133,000 possible claimants would get a share of any HL offer, whether it is a token one or substantial. There are clear incentives for HL to settle quickly before the claim size increases. There is no requirement for HL to extend any settlement to other HL customers who have not joined the RGL claim. HL shareholders are unlikely to approve of such generosity of spirit (even if it is Christmas!).
I agree that talking about a large claim is a way of drumming up business, but if it results in more people joining the claim and more people getting a payout and gets HL moving towards an early settlement, surely that is not bad thing?
Stuart and Piotr, Please can you send me a copy of the invoice Leigh Day sent you. I was under the impression that Leigh Day had not sent anyone an invoice for their services. my email is cliff.weight@sharesoc.org
thank you. Cliff
The Leigh Day claim was announced in 2020. At the time there was a deafening silence from Woodford, Hargreaves, Link and the FCA.
The FCA first announced that it was investigating Link in late 2022, spurred by Link’s own announcement to the Australian Securities Exchange. The potential Scheme of Arrangement was disclosed in 2023.
Arguably, without pressure from the litigators, media and ShareSoc, this would have been quietly swept under the rug as a market-related loss.
There is always a “prisoner’s dilemma” with litigation. Those who take positive action incur costs as a result, while those that hang back can sometimes benefit from the resulting settlement without incurring those costs. But collective inertia is unlikely to result in redress.
A large proportion of legal actions result in a settlement rather than an adjudicated outcome. No rational lawyer or funder would ever take forward a case without addressing this. Investors who sign up to a no-win-no-fee claim should be aware that a settlement will be naturally regarded as a win under the LMA.
The Link Scheme of Arrangement was specifically designed to settle any and all claims against LFSL relating to the Woodford Equity Income Fund by investors who held the fund at the date of suspension (3rd June 2019). The Leigh Day claim is clearly caught by this and settled by this.
It therefore seems reasonable to me that Leigh Day should expect to receive its agreed percentage of the recovery in this instance (regardless of how badly the agreement may or may not have been written).
Note also that Leigh Day is unlikely to hold much discretion in whether it seeks payment, as the primary beneficiary of any receipts will be the third party litigation funder.
In the case of the RGL action things are a little different because apart from the FOS there are no alternative redress processes in sight, and because we are fast approaching statutory time limits.
That doesn’t mean to say that the FCA won’t pull a rabbit out of the hat at the last minute, but they are currently showing no signs of doing so.
Ultimately this is about investors asking themselves whether they want 75% of a potential recovery or nothing. Turning it down simply because a lawyer might get paid for doing some work doesn’t seem right.
ShareSoc’s primary purpose here is to ensure that affected investors are fully informed of their options and to encourage them to make active decisions, whatever those may be.
Turning down 75p in the £1 because 25p goes to a lawyer, means you will get 0p. I agree turning it down simply because a lawyer might get paid for doing some work doesn’t makes sense.