UK law firm files Woodford class action against Link

After failing in its bid to launch a combined class action against Link Group Administration Holdings (ASX: LNK) last month, UK law firm Leigh Day this week struck out on its own by serving a group action in England on behalf of investors in the failed Woodford Equity Income Fund (WEIF).

Leigh Day and fellow UK law firm Harcus Parker had last month sought to unite their separate class actions against Link’s UK subsidiary, Link Fund Solutions, but they were knocked back by a British judge who gave them until January 18 to lodge their separate claims.

Link announced to the market that Leigh Day’s claim on behalf of 985 investors in WEIF, which collapsed in 2019, had been lodged.

It is one of three class actions faced by Link in English and Welsh courts with Harcus Parker representing 1,918 investors and fellow UK law firm Wallace representing 3,215 claimants.

In a brief statement to the ASX this morning, Link said it would ‘vigorously defend itself against these proceedings’.

WEIF, which was led by former UK investment guru Neil Woodford, collapsed leaving £3.7 billion ($6.5 billion) of investor funds frozen. The financial implosion has hounded Link, which was trustee of the fund, ever since.

The fallout ultimately led to Canada’s Dye & Durham having to walk away from a $2.5 billion takeover offer for the share and superannuation solutions provider last year. The deal was scuppered by UK’s Financial Conduct Authority’s (FCA) requirement that Link set aside £306 million ($536 million) for penalties in relation to the WEIF collapse.

Leigh Day’s class action against Link claims that the company ‘allowed WEIF to hold excessive illiquid or difficult-to-sell investments, which caused investors significant loss’.

“In doing so, we consider Link breached the FCA Handbook rules and failed to properly carry out the management function of the Woodford Equity Income Fund,” the law firm says on its website.

Link last month affirmed it was on track to deliver operating EBIT of between $75 million and $80 million for the first half of FY23, which is in line with FY23 guidance of 10 to 12 per cent higher than FY22.