The High Court has struck out a representative claim brought by Wirral Council on behalf of certain investors in two pharmaceutical companies, Indivior plc and Reckitt Benckiser Group plc.
The claim was an attempt to rely on the Supreme Court’s decision in Lloyd v Google LLC [2022] AC 1217 but in the context of claims under section 90 and section 90A of the Financial Services and Markets Act 2000 (FSMA), which provide for liability in respect of untrue or misleading statements or omissions in prospectuses and the published information of listed companies.
The purpose of bringing the claim as a representative action was to ensure that only certain ‘common’ issues of liability concerning the conduct and state of mind of the defendants were live in the proceedings, while deferring all claimant-side issues (such as reliance, causation and loss) to a later stage. The Judge, Michael Green J, held that the investors and their funders did not want the risk and costs of pursuing ordinary multi-party proceedings, in which the judge managing the case might require them to provide information or disclosure or witness evidence prior to a first trial on defendant-side issues. However, he held that this was not a legitimate basis for depriving the Court of its power to case manage such claims. He said that to allow the representative proceedings to continue would mean that a judge would have no power to decide the best way to manage the claims from start to end by reference to all relevant factors, thereby taking away from the Court one of its prime functions to manage and deal with cases justly and at proportionate cost.
The Judge accordingly exercised his discretion by deciding not to allow the case to proceed as a representative action and struck it out.
The judgment is reported at [2023] EWHC 3114 (Comm).
Conall Patton KC appeared for Indivior plc, instructed by Freshfields Bruckhaus Deringer LLP.
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