The full judgment is available here: Wirral Council v Indivior PLC [2025] EWCA Civ 40 (23 January 2025)

As claimants, supported by litigation funders, continue to test the viability of securities actions under sections 90, 90A and Schedule 10A of FSMA 2000, this Court of Appeal decision in favour of the defendant pharmaceutical and consumer goods companies will be welcomed by defendants and their insurers.

The appeal concerned the claimant’s intended use of the representative action procedure provided for under CPR 19.8 to bring proceedings on behalf of institutional and retail investors claiming in respect of alleged fraudulent statements and dishonest omissions in published information.

The defendants contended that the representative action procedure was not appropriate for these claims, which they asserted ought properly to be brought as multi-party actions (i.e. with each investor being a named claimant). In the claims against Indivior and Reckitt, as in ongoing claims against other listed companies, the claims had been brought on both bases (i.e. both as a representative action and, separately, as a multi-party action). The Court of Appeal decision (if not further appealed) will not, therefore, mean the conclusion of those claims but may limit their scope to a smaller claimant group, while also making these claims less attractive to litigation funders.

The Court of Appeal decision follows the High Court decision in December 2023 (available here: Wirral Council as Administering Authority of Merseyside Pension Fund v Indivior PLC [2023] EWHC 3114 (Comm) (05 December 2023)). In that earlier decision, the judge declined to exercise his discretion to allow the representative action to proceed, finding that it would be “unfair and unjust, and contrary to the overriding objective, to allow the Representative Proceedings to oust the jurisdiction of the Court to case manage the claims from the start”, and that the claimant’s proposal for a bifurcated trial (essentially with defendant-side issues heard first) was not, of itself, sufficient reason for a representative action, but rather a proposal that could be considered as part of ordinary case management.

The appeal challenged the judge’s exercise of his discretion (under CPR 19.8 (2) and (3)) in striking out the representative proceedings, where the threshold for bringing such proceedings under CPR 19.8 was, in fact, met. In particular, the claimant pointed to access to justice arguments, in circumstances where it was contended retail investors would effectively be denied justice in that funders would be unwilling to fund retail investors’ claims prior to a finding of liability on the part of the defendant. It is notable that retail investors signed up to the representative proceedings (but not the multi-party proceedings) only shortly before the hearing, perhaps with a view to supporting this argument. The claimant solicitor’s witness evidence as to the appetite of funders, albeit without evidence from the funder itself in this matter, and the discussion of funding more generally, is a point of more general interest in the current litigation environment.

The Court of Appeal judgment considers a number of important recent decisions, both specific to securities claims under FSMA (particularly in the claims against Tesco, RSA, G4S and Barclays), as well as more broadly in relation to the use of representative actions (particularly Lloyd v Google, and the later cases of Commission Recovery v Marks & Clerk and Prismall v Google). We will consider the Court of Appeal decision further but, for now, note the brakes put on representative actions in the area of securities claims and, subject to further appeal, the possible lifting of stays in a number of securities claims commenced in the English courts.