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Global Risks: Horizon Scanning - Litigation against Directors and Officers

01 April 2025

In the Global Risks Horizon Scanning report our experts explore the latest impacts of litigation against Directors and Officers. 

Social and environmental issues are driving increasing litigation against directors and officers, especially in the mining, pharmaceutical, and manufacturing industries. Of growing concern has been US-style securities litigation, backed by litigation-funders seeking significant returns, gaining a foothold in England and Wales. However, recent developments have emphasised the significant hurdles which have limited such litigation to date.

In 2021, Lloyd v Google LLC [2021] UKSC 50 appeared to throw the doors open for representative proceedings - where a claimant sues on behalf of an identically situated "class". Representative claims involve a bifurcated procedure of a first trial on issues common to the group (such as breach by the defendant of the relevant duty or statute), leaving individuals to pursue a second trial on individual issues (such as reliance, losses) with the benefit of the findings in the first trial.

In 2024, the English Court of Appeal considered a case (Wirral Council v Indivior plc [2025] EWCA Civ 40) involving the first time representative proceedings had been attempted for securities claims under ss.90, 90A and Schedule 10A of the Financial Services and Markets Act. These provisions broadly concern misrepresentations in company prospectuses and published material, and open companies up to claims by all shareholders who suffered a loss as a result (similar to securities class action in the US). The case concerned the loss in stock value experienced by shareholders of the defendant companies after the US Department of Justice issued indictments concerning an illegal scheme to extend market exclusivity over opioid Suboxone. After success in litigating the circumstances in the US, litigation funders turned to England to try to capitalise in a similar manner. However, the judge at first instance exercised his discretion to strike the representative proceedings, holding that they were contrary to the Overriding Objective (dealing with cases justly and at a proportionate cost).

In 2025, the Court of Appeal upheld the judge’s decision to strike the representative action. Although sufficient to claim damages in the US, Market/Index reliance (i.e. not relying on company publications, but more generally that the share price and value were accurate at material times) was not sufficient in establishing corporate misrepresentation in England and Wales (per Allianz Funds Multi-Strategy Trust and Others v Barclays PLC [2024] EWHC 2710 (Ch)). The lack of progress in particularising the type of reliance asserted by the claimants was unfairly inflating the class size, potentially allowing liability to be established without any idea of the number of claimants who had a legally-permissible claim. Ultimately, courts maintain discretion to ensure that litigation fairly addresses the interests of all parties, and exercised it here to prevent litigation funders from manufacturing access to justice considerations by refusing to fund certain classes of shareholders in anything but a representative claim.

To read the full section, download the Global Risks: Horizon Scanning report. 

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