Securities litigation in the UK: where are we now?

As shareholders continue to expect greater transparency and proper redress from securities issuers, there has been a surge of interest in pursuing securities litigation under section 90 and section 90A of the Financial Services and Markets Act 2000 (FSMA). The development of a strong litigation funding market, availability of after-the-event insurance and the increasing popularity of group litigation has created the perfect environment for the growth of securities litigation, and as a result, more and more claims are coming to the litigation market.

The RBS rights issue litigation issued in 2013 was a turning point, when claimant shareholders brought claims regarding alleged misleading statements in the prospectus associated with RBS's £12 billion rights issue in 2008. The case settled before trial in 2017, but it showed how claims under section 90 of FSMA could be pursued.

While appetite is growing for these claims, there remains relatively limited case law on some of the key elements of a successful claim. That is likely to change as momentum continues to build, bringing with it the legal certainty which may in turn give potential claimants the confidence to bring new securities claims.

The law

Sections 90 and 90A of FSMA are the principal provisions that enable shareholders to bring claims against an issuer where they have suffered losses arising out of misleading or untrue statements made to the market.

Section 90 creates a liability in relation to listing particulars and prospectuses, while section 90A applies more broadly to statements or omissions in published information.

Company prospectuses and listing particulars

Section 90 FSMA provides redress to investors that have acquired securities in a public company and suffered loss as a result of an omission or an untrue or misleading statement in the listing particulars or prospectus. The loss must be connected to the misleading statement or omission.

Liability under section 90 may fall on "any person responsible" for the listing particulars or prospectus. This could be the issuer, the issuer's directors or any other person who authorises the documents or their contents.

There are various exemptions, which are set out in Schedule 10 of FSMA. There is, for example, no liability in circumstances where there was a reasonable belief that the statement was true and not misleading, or that the matter whose omission caused the loss was properly omitted. There is also no liability where it can be shown that the claimant party knew that the statements were untrue or misleading or knew of the omitted matter.

Published information

Under section 90A, an issuer is liable to pay compensation to an investor who (1) acquires; (2) continues to hold; or (3) disposes of securities in "reasonable reliance" on published information which contains an untrue or misleading statement, or a dishonest omission. Liability can also be established where there has been a dishonest delay in publishing relevant information.

This provision can therefore apply to a broader range of information than its section 90 sibling. For example, section 90A captures documents such as the company's annual reports.

However, the hurdles that must be jumped in order to establish liability are somewhat higher. For section 90A to be engaged, there must be a finding of dishonesty. An issuer will only be liable however where a "person discharging managerial responsibilities" had knowledge of the untrue or misleading statement, was reckless in regard to it, or knew that the omission was the concealment of a material fact. The test for dishonesty here is whether the conduct would be regarded as dishonest by those who regularly trade in the securities market and the applicable person was aware (or taken to be aware) of this.

The claimant pool includes anyone who has suffered a loss as a result of the dishonest conduct, but the claim can only be brought against the issuer of the securities, and the claimant must show that there was an individual reliance on the misleading statement or dishonest omission.

Limited substantive case law

The component parts of sections 90 and 90A remain relatively untested in the courts, as the overwhelming majority of cases have settled at preliminary stages.

While the courts have had occasion to provide input in relation to isolated elements of these claims, with the exception of the slightly unusual and fact specific Autonomy case (discussed below), they have not yet had the opportunity to hand down a comprehensive judgment.

No case has made it to final judgment on quantum, leaving critical points of the statutory framework undeveloped, which naturally creates uncertainty.

For instance, a significant risk to businesses exposed to these claims is the lack of certainty surrounding the value of any potential claim. FSMA provides no indication of how damages should be calculated, and the number of possible approaches available in this regard is perhaps another factor encouraging defendant parties to settle these disputes before final judgment.

Reliance in section 90A claims

The recent interim decision in Allianz Funds Multi-Strategy Trust (on behalf of Allianz Best Styles Global Equity Fund) and Others v Barclays (2024) was perhaps the first decision which substantively developed the law on an essential component of section 90A claims, which concerned the matter of reliance.

In this case, the High Court was asked to consider the extent to which a category of the claimants could be considered to have acquired, continued to hold or disposed of shares in reliance on published information (within the meaning of paragraph 3, schedule 10A FSMA) in circumstances where they had not read or considered the information alleged to be untrue or misleading.

Following its decision in ACL Netherlands BV v Lynch (2022) (widely knowns as the Autonomy case), the High Court held there could be no reliance in cases where the claimant had not read or considered the offending information (common reliance claims) – a price or market reliance was not sufficient.

In the same decision, the court also clarified that, under paragraph 5, schedule 10A FSMA, losses sustained as a result of a "dishonest delay" (delay claims) can only be viable when the information omitted is eventually published – there can be no liability for the issuer in circumstances where the information remains unpublished forever.

However, in a judgment handed down in March 2025 in Various claimants v Standard Chartered [2025] EWHC 698 (Ch), the High Court refused Standard Chartered's application for a strike-out or reverse summary judgment of similar common reliance claims and delay claims.

In relation to the common reliance claims, the court acknowledged the judgment in Allianz but noted that this is a developing area of law and accordingly, these points should be decided after the claimants have had the opportunity to adduce expert evidence on the matter. Regarding the delay claims, the court noted its concern about the correctness of the requirement that information eventually be published for liability to be engaged. It therefore considered that it would be inappropriate to grant the strike out or reverse summary judgment in this case.

Osborne Clarke comment

The Allianz decision is significant in that it confirms the challenges faced by passive investors looking to bring claims (who form a large part of the market) and highlights the importance for active investors of recording their investment decisions. The decision in Standard Chartered does however add a glimmer of hope that these cases will be dealt with on a fact-specific basis.

In spite of this important decision, many elements of section 90 and section 90A claims remain substantively undeveloped.