Press Release 131 – ShareSoc Endorses RGL Claim

ShareSoc, the UK’s premier individual investor association, has endorsed the RGL Woodford Group Litigation against Hargreaves Lansdown.

• The RGL Woodford Group Litigation alleges that Hargreaves Lansdown continued to recommend investing in the Woodford Equity Income Fund (WEIF) even after they apparently knew of liquidity issues in the fund from November 2017
• Over 133,000 potential claimants held WEIF via the Hargreaves Lansdown platform
• The RGL Woodford Group now comprises over 5,000 claimants, with a combined claim of approximately £140 million
• The RGL Woodford Group Litigation is now the only remaining WEIF-related group legal claim
• ShareSoc is supporting RGL in making potential claimants aware of the group litigation, and the possibility of further recovery of losses suffered
• ShareSoc’s Woodford Campaign has been instrumental in raising the profile of the Woodford debacle and in forcing the FCA to act after years of vacillation

Cliff Weight, speaking on behalf of ShareSoc, said:

“When Woodford failed, investors lost over £1bn. Link Financial Services Limited has agreed to pay between £186m and £230m in compensation via its Scheme of Arrangement, leaving investors hugely out of pocket.

The RGL Woodford Group Litigation, if successful, offers the 133,000 individuals who invested via Hargreaves Lansdown the possibility of achieving proper compensation for their losses on a no-win-no-fee basis.”

 Michael Green from RGL said:

We are delighted that ShareSoc, an independent individual investor organisation, has endorsed the RGL Woodford Group Litigation and we hope this will give comfort to potential claimants. The more people who join, the greater the opportunity to hold to account those who have fallen short of their obligations to investors.”

The ShareSoc Endorsement

ShareSoc believes that the potential benefits of the RGL Woodford Group Litigation against Hargreaves Lansdown outweigh the identified risks for the vast majority of claimants, and that it is in the interest of affected investors to participate. On this basis, ShareSoc has chosen to endorse the claim.

Following the settlement of all claims against Link Fund Solutions Limited via a Scheme of Arrangement, the RGL Woodford Group Litigation is now the only remaining WEIF-related group legal claim that offers the prospect of further redress. ShareSoc considers it unlikely that further claimant groups will emerge.

The alternative of making a claim via the Financial Ombudsman Service is potentially still available to investors at this stage, but complaints need to be made within 6 years of the relevant event, or within 3 years of becoming aware.

The claim is constructed on a “no-win-no-fee” basis. This means that all litigation costs are covered by a litigation funder, to be reimbursed out of any eventual recovery.

The process involves claimants signing a Litigation Management Agreement (LMA), authorising RGL to arrange litigation funding and insurance against adverse costs, to appoint solicitors and counsel, and to manage the proceedings on their behalf.

ShareSoc understands that RGL has raised sufficient finance to cover the expected cost of a court case, and has sourced insurance cover which will be maintained at an appropriate level.

As with any litigation, there are risks to be considered. RGL’s website includes FAQs designed to answer concerns an investor may have regarding the costs of the proceedings, the funding and insurance arrangements and so on. These can be viewed here. Further risks and considerations are highlighted on the ShareSoc website.

ShareSoc has reviewed the RGL Group legal claim and certain associated documents. The association has considered:

• The no-win-no-fee structure
• The claimant’s 75% share in any recovery, however small
• The risks associated with group litigation and court proceedings
• Counsel’s opinion
• RGL’s status and reputation

In ShareSoc’s view the benefits of joining the RGL claim outweigh the risk and administrative effort involved in doing so for all but the very smallest holdings in WEIF.

Potential claimants should consider their own position carefully, and should read the claim documents, study RGL’s FAQs, and, if necessary, seek legal advice.

See https://www.sharesoc.org/campaigns/woodford-campaign/ for further information.

Next steps

ShareSoc will continue to seek to achieve its campaign objectives, to recruit more members to its 1,800-strong Woodford Campaign and to support the RGL Woodford Group Litigation.

Our campaign objectives are to:

1. facilitate communication between Woodford investors
2. help affected Woodford investors recover their losses where possible
3. hold to account those who contributed to those losses through action or inaction
4. improve the way regulators regulate.

More information on the ShareSoc Campaign is here, https://www.sharesoc.org/campaigns/woodford-campaign/