Over the last 12 months there have been four key areas of development in securities litigation in England & Wales:
- First, there is continued debate over what is required from investors in terms of showing reliance on the relevant misleading statements on which a claim is based, and as part of this, whether passive investors are precluded from participating in claims because of the specific difficulties they face in satisfying any requirement to show reliance.
- There have been attempts by claimants (and law firms and litigation funders supporting claimants) to find innovative procedural mechanisms to bring securities claims on behalf of groups of investors more efficiently.
- There continues to be developments in the courts’ approach to some of the key tactical tools available to investors when bringing securities claims, such as the disclosure of sensitive or confidential material held by defendants.
- At the same time as these issues have been playing out before the courts, there is a growing political debate about the London Stock Exchange’s lack of international competitiveness, and whether this has been prompted in part by a reassessment of legal risks associated with a London listing given the increasing number of securities claims against issuers whose shares are listed in London, or mass consumer claims brought in England & Wales which seek to use an issuer’s listing in London as a basis for establishing jurisdiction. To some extent, this has prompted changes to the prospectus rules and the statutory causes of action investors have against issuers which narrow the scope to bring securities claims.
Each of these developments and the latest relevant cases in the English courts are explored in more detail below.
Passive investors and reliance
Where reliance is an essential element of the cause of action, including the statutory cause of action available to investors under section 90A FSMA, it remains one of the most contested issues in securities litigation in England & Wales.
The strict approach to the reliance requirement in the Allianz case
In Allianz Funds Multi-Strategy Trust & Ors v Barclays Plc [2024] EWHC 2710 (Ch) (Allianz), Mr Justice Leech granted reverse summary judgment in favour of Barclays and against a large cohort of investor claimants whose investment processes were wholly or partially “passive“, “index-linked” or “tracking” in nature who had brought claims against Barclays under section 90A. The passive investor claimants had not pleaded that any decision-maker actually read or considered Barclays’ published information which was alleged to have been misleading; instead, they argued that the requirement to show reliance was indirectly satisfied on the basis that the claimants assumed Barclays’ share price would reflect the content of information published by Barclays, and that Barclays would comply with the applicable regulatory requirements when publishing that information, including by disclosing all relevant negative information about its business. Due to the fact Barclays allegedly did not disclose all relevant negative information in accordance with its regulatory obligations, it was argued by the claimants that the share price ended up being inflated as against what the shares were actually worth. The passive investor claimants were said to have “relied” on the misleading statements in the published information because they assumed that Barclays’ share price reflected the true value of the business.
However, the Court:
- rejected any “fraud on the market” theory of reliance under section 90A (which is prevalent in US securities litigation), whereby reliance by an investor may be assumed where misleading information published by an issuer has an effect on the market price, even though the investor may not have been aware of the specific information which is said to have been misleading;
- held that the test for reliance under section 90A reflects the common law test for reliance in deceit; and
- concluded that price-only or “market” reliance, without some form of informational link between the published information and the claimant’s decision-making process (whether directly or through other sources), was insufficient: a decision-maker must have read and considered the published information, or third parties who directed or influenced their investment decisions must have read and considered the published information.
The decision removed a substantial proportion of the claim, representing all the passive, index-linked, or tracking investor cohort of claimants. It was widely seen as a significant restriction on the scope of section 90A claims because of the significant presence of passive investors operating in the market and the fact that the decision effectively meant that such investors could never satisfy a requirement to show reliance. This was controversial in view of the purpose behind section 90A, which was intended to make it easier for investors in general (rather than some types of investors but not others) to bring claims against issues for misleading statements in their published information.
The more open approach in the Standard Chartered case
The Court took a more cautious approach in Persons Identified in Schedule 1 v Standard Chartered Plc [2025] EWHC 698 (Ch). On an application made by Standard Chartered to strike out or obtain reverse summary judgment in respect of claims brought by a group of investors on the basis of indirect or “market reliance”, Mr Justice Green declined to follow the approach taken by Leech J in the earlier Allianz decision. Whilst accepting that section 90A does not import a market-reliance presumption, in his judgment in Standard Chartered Green J emphasised:
- there has been no decision on the meaning of “reliance” under section 90A;
- the test for reliance in deceit – which Leech J had imported into section 90A – was itself a developing area of law, particularly in relation to a supposed requirement to show “conscious awareness” of the representation (or representations) forming the basis of the claim in deceit;
- the need for caution before ruling out particular modes of reliance (including reliance mediated by intermediaries, investment processes, or pricing signals) without trial; and
- Allianz should not be treated as having conclusively determined the boundaries of permissible reliance for all cases.
This is not to say that Green J considered that Leech J had been wrong in Allianz in deciding that passive investors could not satisfy the test for reliance, but as a matter of case management, he considered that the passive investor claims should be determined at trial and should not be dismissed at an interlocutory stage of the proceedings without the benefit of the additional evidence available at trial.
The latest developments
After the High Court decisions in Allianz and Standard Chartered, the Privy Council’s decision in Credit Suisse Life (Bermuda) Ltd v Ivanishvili [2025] UKPC 53 (Credit Suisse Life) rejected “conscious awareness” as a free-standing requirement for reliance in the tort of deceit. This decision has added further – and potentially definitive – weight to the argument that evidential features such as active reading or recollection should not too readily be elevated into legal elements of a cause of action based on misleading information, something which is highly relevant to securities claims brought by passive investors. The earlier decisions which were identified as being “wrong” in Credit Suisse Life include decisions which were reviewed and followed by the Court when dismissing the claims of passive investors in Allianz.
A question left undecided by Credit Suisse Life is whether the analysis of the requirement of conscious awareness in deceit in the Privy Council’s judgment should be extended to apply to the statutory cause of action under section 90A given the wording of that provision (and Schedule 10A which is linked to section 90A). The Court in Allianz drew parallels between the test for reliance in deceit and the test in section 90A, but the restatement of the test in deceit in Credit Suisse Life may lead the courts to reassess whether it continues to be appropriate to link the two.
A further relevant development which post-dates the decisions in Allianz and Standard Chartered has come from the Skatteforvaltningen v Solo Capital Partners LLP & Ors [2025] EWHC 2364 (Comm) (SKAT) trial judgment, in which the Court examined how complex financial transactions are executed in practice, including the role of automated and algorithmic trading systems. Although SKAT was not a securities case, it was a claim in deceit, and the Court’s analysis reflects a broader judicial willingness to engage with how decisions are made in modern financial markets. The Court recognised that trading strategies may operate through automated processes that incorporate assumptions about counterparties’ conduct or market norms, even where no individual trader consciously evaluates each piece of information, and that the test for reliance should accommodate this. At [531] of his judgment, Mr Justice Andrew Baker said that the law:
“[R]cognises the possibility of mechanistic or automatic reliance that may be sufficient, so that there is inducement, although the making of the individual decision said to have been induced does not involve thought being applied by any human mind to what is or is not being conveyed by the words and/or conduct constituting or giving rise to the representation”
This has clear potential relevance to the reliance debates in Allianz and Standard Chartered, where the question is how far reliance may be shown in the absence of direct, conscious engagement with disclosed information. Together with the Privy Council’s reasoning in Credit Suisse Life, these developments during the course of 2025 suggest that – notwithstanding the Allianz judgment – the courts may be increasingly open to the idea that reliance may be established in cases of algorithmic and process-driven investment decision-making.
The unanswered question
The question of whether passive investors can bring securities claims where the cause of action has a reliance requirement presently sits uneasily between a relatively strict approach in Allianz and a more open, evidence-driven approach in Standard Chartered (although the Court in Standard Chartered left it open to adopt the same approach in Allianz once there had been a trial). The Court of Appeal had been expected to consider the issue again in early 2026, and particularly the effect of the Credit Suisse Life judgment on securities claims under section 90A and the correct approach in relation to claims brought by passive investors, in the context of an appeal of Green J’s judgment in Standard Chartered. However, it was announced that this claim was settled in late 2025.
Representative actions in securities claims
In Wirral Council v Indivior Plc; Wirral Council v Reckitt Benckiser Group Plc [2025] EWCA Civ 40 (Wirral), the Court of Appeal confirmed that CPR rule 19.8 representative actions will rarely be suitable for securities claims.
What is a representative action, and what are the advantages of this procedure?
A “representative action” is a claim where a named claimant acts as the representative of a class of investors who are not themselves parties to the proceedings. The representative claimant brings the claim on the basis that the investors it is representing all have the “same interest” in the claim. Any resulting Court judgment in the claim is then binding on the investors who are being represented and, equally, may be enforced by those investors. This is different from the usual way securities claims are brought on behalf of large numbers of investors in England & Wales, which involves “opt-in” group actions where each investor participating in the action is required to become a named claimant in the Court proceedings and expose themselves to the risks associated with being a claimant.
One of the advantages of using the representative action procedure in securities claims is that it is closer to what investors are used to in US class actions, where they can receive the benefit of a judgment or settlement, but without actively participating in all the Court proceedings. For this reason, the proposed representative claimant in Wirral argued that the use of the representative procedure would enable higher rates of participation by institutional investors who often did not want to become named claimants. A further argument deployed by the representative claimant was that retail investors are regularly prevented from participating in securities claims because of the smaller value of their claims compared to institutional investors (which affects the commercial assessment of acting for such investors on a contingent basis), and the representative procedure may enable retail investors to benefit from a judgment in favour of the representative claimant.
The Court of Appeal’s approach in Wirral
Notwithstanding these arguments deployed by the representative claimant in Wirral, the Court of Appeal upheld the High Court’s decision to strike-out two large securities claims brought on a representative basis on discretionary case management grounds in favour of alternative opt-in group action proceedings which had been commenced by investors against the same defendant issuers. In adopting this course, the Court of Appeal considered:
- there is no hierarchical presumption in favour of the representative procedure for bringing claims on behalf of large groups of investors when compared to alternative approaches like the more established opt-in group actions;
- the judge has a discretion as to whether to allow representative proceedings to continue;
- the proposed case management structure in Wirral, in which common, “defendant-side” issues would be tried first with little or no involvement of individual claimants because the represented claimants were not parties to the proceedings, would limit the Court’s ability to case-manage individual reliance and causation issues;
- this was considered to run contrary to established judicial practice in the management of securities claims, which involves progressing both “defendant-side” issues and “claimant-side” issues from the outset of proceedings; and
- the Court was sceptical of access to justice arguments about increasing rates of participation in securities claims or expanding the types of investors who could participate to include retail investors, and saw these as either being insufficiently supported by evidence, or stemming from decisions made by the representative claimant’s litigation funder about who was and who was not permitted to participate in alternative opt-in group action proceedings which had not been adequately explained to the Court.
The Supreme Court refused permission to appeal the Court of Appeal’s judgment dismissing the representative action. This means that the representative action procedure is likely to remain exceptional for securities claims. The default mechanism for bringing such claims on behalf of groups of investors will remain opt-in group action proceedings, with the Court retaining close control over the phasing and trial of claimant and defendant-side issues.
Disclosure of regulatory investigation materials by companies facing securities claims
Adverse findings made by regulators help establish many of the constitute elements of the causes of action available to investors against issuers. The consequence of this is that many securities claims follow on from regulatory investigations and findings of misconduct made against issuers.
Against this background, an important issue which can arise concerns whether, and in what circumstances, issuers who are being sued by investors must disclose materials produced during the course of a regulatory investigation which are subject to domestic or international confidentiality constraints.
The guidance provided by the Court in the Standard Chartered and Glencore cases
In Standard Chartered, the defendant bank applied to withhold certain documents from disclosure on the basis that they were subject to strict duties of confidence owed by the defendant to regulators in the US and Singapore. It argued that, if it had to disclose documents in breach of these duties pursuant to an order of the English Court, there was a real risk that it would face criminal prosecution or other serious regulatory sanction abroad. However, in an ex tempore judgment given over two hours at a hearing in early August 2025 (recorded in an approved transcript with the neutral citation [2025] EWHC 2136 (Ch)), Green J dismissed the bank’s application. The Judge considered that foreign confidentiality regimes do not operate as an automatic bar to disclosure in English proceedings:
“[E]ven where there is a real risk of prosecution proved, the English Court will rarely be persuaded to dispense with disclosure, it must be even more unlikely that it would do so because of a risk of a much lesser penalty such as a form of civil enforcement.”
The bank appealed this judgment. The Court of Appeal dismissed the appeal in a judgment handed down in December 2025 ([2025] EWCA Civ 158)).
The approach of the courts to disclosure of material from regulatory investigations was also examined in the Glencore shareholder group action, where the Court analysed whether disclosure of documents related to overseas anti-corruption investigations could expose Glencore or its officers to foreign criminal-law risks. In Aabar Holdings SÀRL & Ors v Glencore Plc & Ors [2025] EWHC 2243 (KB), the Court conducted a detailed assessment of: (1) whether disclosure would constitute an offence abroad (by reference to the applicable foreign law); (2) whether there was a real risk of prosecution; and (3) whether confidentiality protections in the English proceedings could mitigate the risk.
In Standard Chartered and Glencore, the English Court was reluctant to attach any real weight to arguments made by the defendants that they may face foreign prosecution, and proceeded to order the disclosure of documents which the defendants were seeking to withhold. This consistency in approach demonstrates the very high threshold for defendants who want to withhold from disclosure documents which they would be required to disclose under normal disclosure rules, and the difficulties they face in balancing international confidentiality obligations and domestic disclosure requirements.
The use of disclosure for encouraging settlement
It is also worth noting that the Standard Chartered litigation was settled between the circulation of the draft judgment of the Court of Appeal to the parties and the hand down of the final judgment. Although the substance of the settlement negotiations is of course confidential to the parties, the timing of the settlement suggests that the defendant bank’s concerns about potential breaches of confidential obligations owed to foreign regulations may have been a factor in its willingness to enter a settlement. This shows how disclosure can be used as a tactical tool by claimant investors to generate settlement pressure on defendant issuers.
Privilege and the end of the shareholder rule
Another notable development in 2025 is the overturning of the so-called “shareholder rule” on privilege.
Older securities claims such as Sharp & Ors v Blank & Ors [2015] EWHC 2681 (Ch) (a judgment handed down as part of the Lloyds/HBOS shareholder action) and Various Claimants v G4S Plc [2023] EWHC 2863 (Ch) had treated it as established law that a company could not assert legal advice privilege against its own shareholders (save where the privilege relates to documents produced for the purposes of litigation between the company and its shareholders). In late 2024, however, the Court in Aabar Holdings SÀRL v Glencore Plc & Ors [2024] EWHC 3046 (Comm) expressed doubt about the doctrinal foundations of the shareholder rule and held that, properly analysed, it did not form part of English law.
The debate was resolved in 2025 by the Privy Council in Jardine Strategic Ltd v Oasis Investments II Master Fund Ltd (No 2) [2025] UKPC 34, where the Board held that the rule forms no part of the law. This decision removes a tactical tool used by investor claimants in some securities claims to obtain sensitive internal material belonging to defendants.
The wider risk landscape for issuers of securities and prospectus reforms
The broader risk landscape arising from securities litigation
The last few years have seen:
- a growing pipeline of funded securities claims, which often follow a standard model of following on from regulatory investigations and adverse findings by regulators; and
- very large, litigation-funded mass consumer claims, which often target large listed companies because of their ability to pay damages. An example of this is Município De Mariana v BHP Group (UK) Ltd & Anor [2025] EWHC 3001 (TCC), where more than 620,000 Brazilian claimants succeeded at the liability stage against the Australian mining group BHP in relation to the operation of a dam in Brazil. BHP operated a dual-listed structure in Australia and London until 2022, and the Court found English jurisdiction in this case because of BHP’s London listing.
These developments have coincided with subdued IPO activity on the London Stock Exchange, and a steady flow of high-profile companies either moving or considering moving listings overseas, particularly to New York. BHP is only one example of this when it made the decision to end its London listing.
Some commentators have suggested that the risk of securities litigation and mass claims may be influencing perceptions of heightened legal risk associated with a London listing – particularly among international issuers who have more flexibility over listing venue – and contributing to the poor performance of the London stock market. This has potentially stimulated some recent debates around the future of litigation funding and whether the law should be changed to increase the regulatory and procedural burden on litigation funders and claimants bringing funded claims. It may have contributed to the judicial opposition to the introduction of practices and approaches which are more aligned with securities claims in the US (where is easier to bring large-scale securities claims), such as the decision in Allianz to reject the fraud on the market theory of reliance, and the decision in Wirral to reject the use of the representative action procedure.
Prospectus reforms
One response to concerns about the performance of UK capital markets has been reform of the prospectus regime. In July 2025, the FCA published Policy Statement 25/9 and final version of the new prospectus rules, which will reshape UK prospectus regime with effect from January 2026. The new rules can be found on the FCA’s website here.
The reforms are framed as part of a broader effort to revive London’s capital markets and attract major listings. As the FCA explained when it published the new prospectus rules, the intention is to “make it easier for companies to raise capital in the UK and reduce costs when admitting securities to UK public markets” and “improve the relative competitiveness of our regulation compared to other jurisdictions“.
Key features of the new rules include:
- limiting the circumstances in which a prospectus is required for further issues by already-listed companies; and
- a more permissive regime for forward-looking statements, including a protected category where specified conditions are met.
Fewer prospectuses
The reforms may have the effect of narrowing investors’ ability to bring certain types of securities claims. Section 90 FSMA and the provision replacing it, Regulation 30 of the Public Offers and Admissions to Trading Regulations 2024, provide investors with a cause of action against an issuer where the issuer has made misleading statements in a prospectus. If the prospectus rules are changed to reduce the circumstances in which an issuer is required to publish a prospectus, it naturally follows that there will be reduced scope for claims based on prospectus liability under section 90/Regulation 30.
The introduction of “protected forward-looking statements“
In addition, the new safe-harbour provisions for forward-looking statements in prospectuses (known as “protected forward-looking statements” or “PFLRs“) found in Part 3 of Schedule 2 of the Public Offers and Admissions to Trading Regulations 2024 make it more difficult for investors claimants to bring claims based on certain forward-looking statements contained in prospectuses. Instead of being able to bring claims in circumstances where the defendant issuer (and anyone else responsible for a prospectus) did not reasonably believe in the truth of a forward-looking statement at the time it was made, investor claimants will have to show that the defendant issuer (and other defendants, as the case may be) knew the forward-looking statement to be untrue or misleading or was reckless as to whether this was the case, or that an omission from a forward-looking statement constituted a dishonest concealment of a material fact. This introduces a knowledge requirement into the cause of action which is presently missing from section 90.
A knowledge requirement is always difficult for claimants to demonstrate because it can require a claimant to have evidence addressing the internal affairs of the defendant or the state of mind of the defendant company’s management at the time the prospectus was published. Even where the reality is that the issuer knew the relevant forward-looking statement was untrue or misleading at the time it was made, claimants may not be able to show this with a sufficient degree of confidence at the outset of proceedings to bring and plead a claim which requires them to adequately address the state of the defendant’s knowledge. Accordingly, the consequence of the introduction of a knowledge requirement will be to seriously curtail the circumstances in which investors can bring claims where an issuer has seriously underperformed against its stated expectations, even where the issuer has deliberately misled the market about how it was expected to perform.
How we can help
Members of our Commercial & Regulatory Disputes team have considerable experience acting in securities claims.
Jennifer Morrissey, who is a member of the team and acts as Head of Securities and Investment Disputes, acted for the claimant investors in the Lloyds/HBOS shareholder group action, one of the first major securities claims in the English courts. Since then, she has acted on a number of high-profile disputes between investors and issuers of securities. This has recently included acting for investors in the listed real estate investment trust Home REIT plc, whose shares were suspended from trading in early 2023 following allegations of wrongdoing in the management of the company.
Please contact Jennifer Morrissey or Edward Argles if you would like to explore how we can assist you with a securities claim.
