A law firm has begun court proceedings against Link Fund Solutions over its handling of the now-defunct Woodford Equity Income Fund.
Leigh Day has issued a claim form on behalf of an initial group of 100 of the fund’s investors, in an attempt to recover their losses from the collapse of the fund in 2019.
In a statement released today (September 27), Leigh Day said the claim follows a ‘detailed and extensive’ letter before action, and ‘significant’ pre-action correspondence with Link’s lawyers, Clifford Chance.
It added the case has now reached a stage where the investors’ legal team feels it has become necessary to issue proceedings in order to take the matter through trial.
Leigh Day claims Link was in breach of the rules of the Financial Conduct Authority in the way it monitored and managed the fund, which it said ultimately led to the fund’s collapse.
Boz Michalowska, partner at law firm Leigh Day, said: “This is a big step forward in the legal action which we hope will allow investors of the Woodford Equity Income Fund to get justice and their hard-earned pensions and savings returned to them.”
In June, Link Fund Solutions said it would “vigorously defend” the case brought against it by Leigh Day.
Leigh Day said has been instructed by over 11,000 claimants and will be issuing proceedings on a rolling basis for all of its clients.
It is seeking to consolidate the claims under a group litigation order, where the risks, costs and benefits of the group action can be shared by all the claimants on the group action register.
Link did not respond to a request for comment.
Woodford: What happened?
Woodford's flagship Equity Income fund had been struggling with outflows which were running at a net £9m per working day in May 2019.
On June 3 that year Kent County Council asked to withdraw all of the £250m it had invested with the manager through its pension fund. This helped trigger the fund's suspension.
Following this Woodford scrambled to sell shares to improve the fund's liquidity in an effort to preempt a wave of redemptions when the fund reopened.
But on October 15 Link Fund Solutions, the authorised corporate director of the fund, announced it would be wound down and the former star manager fired.
Later that day Woodford walked away from his remaining two investment vehicles and confirmed he had taken the decision to close Woodford Investment Management.
Thousands of investors saw their money trapped in the suspended fund and lose considerable sums as a result.