A recent High Court decision in a shareholder class action under s.90A of FSMA, on the approach to be adopted for a split trial of the action, includes interesting observations on the critical question of reliance, which has become a central battleground in such claims: Various Claimants v Serco Group plc [2023] EWHC 119 (Ch).

The decision shows the impact of the judgment in the first s.90A FSMA case to come to trial in this jurisdiction (the Autonomy judgment, considered in our banking litigation blog post here), in which the court confirmed that reliance must be upon a statement or omission, rather than, in some generalised sense, on a piece of published information. The defendant in the Serco case suggested that, in light of the Autonomy judgment: (i) the cases against it based on direct reliance are now much more limited; (ii) a material number of claimants have dropped out; and (iii) those claiming on the basis of indirect reliance have great difficulties because of the clarification of reliance in Autonomy. These are interesting (although not unexpected) developments, given that the requirement for a claimant to show what it relied upon will make it more difficult to bring a successful s.90A claim.

The present judgment also confirms that the claimants in the Serco litigation are now relying on two categories of indirect reliance as follows:

  • Market reliance: ie a decision, including an automated decision, to acquire, continue to hold or dispose of shares in the market at the (inflated) price at which they were in fact acquired and held.
  • Price reliance: ie market reliance in circumstances in which the claimant was also aware of the price of the shares, and believed the published information to be true, complete and accurate.

For more information see this post on our Banking Litigation Notes blog.