Link Fund Solutions will “vigorously defend” the case brought against it by Leigh Day on behalf of 7,000 clients of the Woodford equity income fund.
Leigh Day said it has received a response to its letter before action, sent to Link, in which Link stated it did not accept the claims and would fight them.
The letter is the first formal step in the group litigation process and alleges that Link mismanaged the fund, and failed to maintain appropriate levels of liquidity. The letter added that the failure was “avoidable, had Link done its job properly”.
The law firm said if Link did not agree to compensate investors, it would initiate proceedings in the High Court on behalf of the investors.
Link declined to comment.
Boz Michalowska, spokesperson for Leigh Day, said: “We have received a 40 page response from Link following our LBA from Clifford Chance, Link’s lawyers, who have indicated that they are vigorously defending the claim.
“We have already provided Clifford Chance with details of 7000 of our clients and we will now prepare for the issue of formal court proceedings."
She said the firm had obtained after the event insurance to pay the defendants' costs in the event the claim is unsuccessful.
She added: "We will continue to work to achieve the best outcome for the investors who lost their hard-earned savings and investments.
“Given the recent update from the Financial Conduct Authority into its own investigation into the matter, we believe that the quickest way for investors to be compensated for their losses is through the group claim.”
The chief executive of the FCA recently told a Treasury committee that its investigation into the failure of the LF Woodford Equity Income fund is unlikely to be published before the end of the year due to the complexity of the task at hand.
He said the FCA had issued more than 30 information requirements which has led to the gathering of over 20,000 items of relevant material from all the key parties, which it would now continue to analyse.
Mel Stride MP, chairman of the Treasury committee, said in response: “Almost two years since the FCA launched its investigation into the collapse of the Woodford Fund, we’re yet to see any results, or be told when we can expect an indication of any findings.
“Whilst it is right that all due process must be followed, the longer the investigation goes on, the greater the sense of disappointment that will be felt by those who lost out.