Woodford Campaign Update 14

Vote outcome and Court Hearing 18 Jan 2024 


A single meeting of Scheme Creditors (the Scheme Meeting) was held on 13 December 2023. Work is ongoing to verify the votes cast at the Scheme Meeting, however, provisional numbers are set out below.  

Over 54,000 Scheme Creditors attended the Scheme Meeting in person, or by proxy. Of the Scheme Creditors who voted, approximately 93.7% in number, representing approximately 96.1% in value, voted in favour of the Scheme. 

Of the three voting cohorts identified in the Scheme notice dated 14th December 2023, some 9.8% of the cohort “Individual Scheme Creditors: who submitted a Voting Form in their own name” (14.5% by value) voted against the Scheme. 

The clear discrepancy between this and the voting behaviour of the second cohort (Individual Scheme Creditors who voted via an Authorised Representative) strongly suggests that the Authorised Representatives failed to canvas the views of their underlying beneficial owners. Only 0.6% of this cohort (1.3% by value) voted against the Scheme. 

The voting behaviour of the third cohort, Institutional Scheme Creditors, appears rational since these institutions will have losses that greatly exceed the payment threshold of the FSCS. This cohort voted unanimously to approve the Scheme. 

Of concern to ShareSoc is the divergence between the voting outcome of the first, most representative, cohort relative to a poll of members of our own Woodford Campaign. Our poll, conducted in December, indicated an intention on the part of 73% of campaign members to vote against the Scheme, with 12% in favour (6% had decided not to vote, and 9% were at the time undecided).  

If approved, the Scheme must then be sanctioned by the High Court. The Scheme has been devised as a mechanism for Link to reach a final settlement with ALL WEIF Investors, regardless of whether they are involved in a legal claim. 

ShareSoc letter to the Court 

On 21 December 2023, ShareSoc wrote to the Judge for the Scheme Hearing on 18 January 2024, making the following key points: 

It is very good to see some element of redress being achieved for harmed investors, and it is unsurprising that, based on the information supplied from Link and the FCA, some investors have voted so strongly to take what is on the table.   

However, there are three fundamental flaws to the Scheme which make it unfair to Scheme Creditors unless further measures are intended. 

The first flaw is the FCA’s calculation of harm, which is woefully inadequate. It naively focuses only on one element – unequal treatment of investors – while ignoring the greater damage that resulted from an apparent reckless disregard for the fund mandate, for the formal liquidity constraints that apply to a UCITS fund, the reckless manner of the liquidation of fund assets and for the opportunity costs to WEIF investors since Suspension in the form of foregone returns / interest on their investment capital.  

The second flaw is that the proposed redress falls short of even the FCA’s own very limited estimate of harm by £70m to £120m. There is a compensation framework in the UK, in the form of the Financial Services Compensation Scheme, which is intended to make investors whole for harms such as these.  

At an absolute minimum, the Court should look for assurances from the FCA that efforts will be made to recover the shortfall relative to the FCA’s own fantasy figure of £298m.  

One possible route to achieving such outcome is the issuance by the FCA of a restitution order against Woodford Investment Management Limited and its principals (or indeed against other parties that have been under investigation, some since 2019).  Such a course of action might, of course, result in the insolvency or bankruptcy of certain of those parties, with the effect that the FSCS would be required to step in to make investors whole.  

ShareSoc submits that the scheme is fundamentally unfair without a formal commitment from the regulator to attempt to recover, at a minimum, the substantial shortfall relative to even its own assessment of the harm suffered by investors. 

The third flaw relates to the design and execution of the Scheme and raises questions as to whether the Vote was representative. In this regard, we focused on: 

  1. voting form and voting complexity. 
  2. whether the voting outcome is representative of the views and interests of Scheme Creditors, and specifically whether votes by intermediaries were in accordance with the wishes of the beneficial owners. 
  3. whether the information supplied by LFSL was fair, reasonable and not misleading.   
  4. whether there was a level playing field in respect of communicating with Scheme Creditors. 


ShareSoc submits that the Scheme is inadequate and unfair to Scheme Creditors.  

We are also of the view that the information provided to Scheme Creditors failed to give a balanced view of the risks and potential rewards of the range of options available to them. 

We request that the Scheme, if it is sanctioned by the Court, be enhanced by:  

  • a formal commitment from the FCA to seek additional redress from other involved parties 
  • imposing alterations to the Scheme such that  
    • 1) the Creditor’s indemnity to LFSL is modified to allow legal redress claims to be made against other parties and to enable the possibility of litigation funding being attracted successfully 
    • 2) that the right for Creditors to make claims via the FOS (and any consequent potential payments via the FSCS) is reinstated. 

We have requested that a ShareSoc representative be allowed to speak at the Hearing to raise the above points and concerns. 

Please note that if you are not already a full member, there is a special discount available for anyone signing up to support ShareSoc as a Full member: Woodford Campaign Member Special Offer – ShareSoc. 

Disclaimer: ShareSoc cannot and does not provide advice. Advice requires knowledge of an individual’s precise circumstances. The above should be viewed only as general guidance. 

  1. Susan Spencer says:

    I voted against it. Cannot believe the result. HL rescinded my request for withdrawal having confirmed my trade to Fundsmith and Lindsell Train. I am seriously out of pocket.

  2. roy saxton says:

    I don’t know what involvement Hargreaves Lansdown had in the voting. I would point out that HL put several ‘secure messages’ about the vote in my HL mailbox but it didn’t send me emails to tell me that it had done so (which it normally does). It seems to me that HL was trying to reduce the number of people voting by not drawing attention to the messages. Did HL then vote on their behalf?

  3. Martin Warden says:

    1. If the potential still to make claims via FSCS is re-instated, is it likely that Leigh Day or similar will set up a follow on group action or a similar follow on claim for individuals based on information they already hold. This to avoid the need for many thousands of individual claims?

    2 Is there any sign yet of punitive action against the individuals responsible for this situation arising.
    These include not only Niel Woodford himself but also those individuals at Link who failed to monitor the fund and failed to hold sufficient insurance such that the compensation available is so woefully inadequate.

    3 Is there any chance of such punitive measures against the Hargreaves Lansdown individuals who so clearly put their own interest above those of their clients.

  4. Bryan Cockings says:

    I only hope ShareSoc. Representative are allowed to speak at the Hearing . It cannot be justice without all party,s concerned are made to answer.

  5. Alice George says:

    A great summary of the merits and demerits of The Scheme.

  6. Janet Whitaker says:

    I’m afraid I just want some money back! My worry is that this will roll on through the courts and only lawyers will gain. Can the response be split so that those of us who want some money back now are paid according to what is on offer and those who want to fight on ( and pay legal fees to do so) can fight for more for themselves? I don’t have the means to do that but am happy for others to try.

  7. Phillip Moores says:

    thank you for all your work on this. I think the points in your letter represent my (and I imagine the majority of other individual investors’) views very succintly. Let’s hope the judge takes them seriously.

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