UK shareholder litigation: 5 key themes from 2024 and what they mean for 2025

2024 was an eventful year for UK shareholder litigation, and 2025 looks set to bring about a number of further significant developments. In 2024, each of the key developments ultimately concluded in a way that is likely to favour defendants (i.e. the listed companies who are sued by investors).  Here are five key themes to keep an eye on this year as the landscape for mass shareholder claims under s.90 and s90A Financial Services and Markets Act 2000 (FSMA) continues to develop. 

1. Representative actions 

We expect 2025 to kick off with Court of Appeal authority on the question of whether a group shareholder claim can proceed as a representative action under CPR 19.8, and a bifurcated representative action at that. If allowed to proceed, such a claim would allow a single claimant to bring a claim on behalf of a group of claimants with the ‘same interest’ in the claim, with the claim being bifurcated such that the claim would result in a decision in respect of ‘defendant-side’ issues only (for example, whether there was a misleading statement in the issuer’s published information) but without any consideration of, or determination of, whether the claimant or the represented group in fact have a valid claim against the defendant (for example, whether those claimants have standing to bring a claim and issues of reliance, causation or loss). 

In Wirral Council v Indivior plc and Reckitt Benckiser Group plc [2023] EWHC 3114 (Comm), the defendant issuers were successful in striking out a representative action brought against them (see our blog post on that decision here). The Judge at first instance recognised that the Supreme Court in Lloyd v Google [2021] UKSC 50 had advocated for greater use of representative actions but the Judge did not think that the Supreme Court “was suggesting that claimants should be able to bring representative actions in order to bifurcate and thereby avoid what they would otherwise be required to do if they had brought ordinary multi-party claims”, which he thought was the “sole purpose and stated advantage” put forward by the representative claimant.

Permission to appeal was granted, with a hearing taking place before the Court of Appeal on 10 and 11 December 2024.  With a number of shareholder claims stayed pending the outcome of the Wirral appeal, judgment is eagerly awaited this year. 

2. Privilege and the ‘shareholder rule’ 

The question of whether a company can assert privilege in its documents against its own shareholders came to a head at the end of last year. 

The so-called ‘shareholder rule’ – that a company cannot assert privilege against its own shareholders except where the documents concerned were created for the dominant purpose of hostile litigation between the company and the shareholders themselves – has been thought to exist for over 135 years and had been recognised by the Courts as recently as in Sharp v Blank [2015] EWHC 2681 (Ch), in the mass shareholder claim brought following the Lloyds/HBOS merger. 

For some time, however, practitioners have been questioning whether the rule is appropriate and, in Various Claimants v G4S Plc [2023] EWHC 2683 (Ch), the Judge acknowledged that it had a “somewhat shaky foundation” and considered there to be boundaries to its application (see our blog post on that decision here). However, in an important judgment handed down in Aabar Holdings S.à.r.l. v Glencore plc & Ors [2024] EWHC 3046 (Comm) in November 2024, Mr Justice Picken went further and held that the rule “should no longer be applied”.

That is not, however, the end of the story:          

• Picken J granted a certificate to leap-frog any appeal of his decision to the UK Supreme Court and so the judgment may be appealed to the Supreme Court if the Supreme Court grants permission. 
• The Privy Council is separately hearing an appeal on 5 and 6 March 2025 from the Bermudian Court of Appeal which, in part, concerns the shareholder rule in Oasis Investments II Master Fund Ltd v Jardine Strategic Holdings[2024] CA (Bda) 7 Civ.

One way or another, it seems inevitable that we will receive appeal court level guidance in the not too distant future on whether the shareholder rules exists and, if so, its scope.

3. Split trials

Split trials have been a feature of section 90A claims since the outset, but the question of where the split is made is far from fixed.  

The orthodoxy (not just in shareholder claims) was for a first trial to consider all issues, except quantum, which would be hived off to a second trial, should one be needed (see MLB Claimants v Tesco Plc [2020] EWHC 2106 (Ch), Autonomy Corporation Limited and others v Lynch and another [2022] EWHC 1178  and initially, Allianz Global Investors GmbH & others v RSA Insurance Group plc [2021] EWHC 570 (Ch) before the Judge reversed his decision on the split in that case). However, 2022 saw the Courts take the view that fewer issues should be in Trial 1, with issues such as reliance, causation and loss being held over to any second trial (see the revised and unreported 2022 RSA decision on the split in that claim, Various Claimants v G4S Ltd [2022] EWHC 1742 (Ch) andVarious Claimants v Serco Group plc [2022] EWHC 2052), albeit with progress to be made on certain of those issues in parallel –  a new (claimant-friendly) orthodoxy was seemingly forming. 

That orthodoxy has been upended in 2024:

• In Various Claimants v Standard Chartered plc [2024] EWHC 1108 (Ch), the claimants unsuccessfully sought an even more claimant-friendly split trial in which they would not be required to progress any work on reliance, causation and loss ahead of Trial 1. The High Court rejected this proposed, directing that Trial 1 would focus on defendant-side issues but also address the claimants’ standing to bring a claim and their common reliance claims, i.e. the claimants’ common arguments that they relied on the price of the defendant’s shares for the purposes of making out the reliance limb of section 90A (note: these common reliance claims are the subject of a strike-out application by the defendant following the Barclays 2024 judgment on passive investors or tracker funds, on which, see below). The claimants have also been ordered to advance some of the Trial 2 issues ahead of Trial 1. 
• In Investors in Barclays v Barclays plc [2024] EWHC 2124 (Ch D), it was ordered that standing, reliance and causation in respect of a sample of seven claimants will be determined in the first trial in the proceedings.

4. Passive investors

There has long been a question as to whether passive investors, such as index-linked or tracker funds, can meet the “reliance” requirement in schedule 10A FSMA. That issue came to a head in Allianz Funds Multi-Strategy Trust & Ors v Barclays Plc [2024] EWHC 2710 (Ch), when the defendant issuer was successful in its application for reverse summary judgment in respect of certain claimants’ pleadings on reliance. The relevant claimants had not reviewed the defendant’s published information (either directly or indirectly through other sources) but argued that they could demonstrate reliance through an articulation of the US-style ‘fraud on the market’ theory - namely, that, in making their investment decisions, they had relied on the company’s share price in an efficient market in which the share price takes into account published information. 

Consistent with the views of Hildyard J in Autonomy (see our blog posts here and here), the Court found that “the test for reliance as it applies to express representations (whether made orally or in writing) requires the claimant to prove that they read or heard the representation, that they understood it in the sense which they allege was false and that it caused them to act in a way which caused them loss.” The Barclays decision resulted in the removal of 241 claimants representing approximately 60% of the total value of the claim.

Permission to appeal the decision was refused by the High Court and the claim settled. We are unlikely, therefore, to have an appeal level decision on this point in 2025. However, with the majority, if not all, of the active shareholder claims including passive investors, it is inevitable that more strike out applications will follow – indeed the strike-out application of the common reliance claims in Various Claimants v Standard Chartered plc is due to be heard before the High Court this February.

5. No trial and no judgments – but plenty to come 

While 2024 saw a handful of new section 90A claims issued, it did not deliver the first full trial of a mass shareholder claim under that provision. Trial in Various Claimants v Serco plc looked set to deliver on that front, but the case settled just one week into trial; and with no trials listed now until 2026, parties and practitioners will have to wait for any full and final decisions under the regime (save Autonomy, which was a somewhat different context). However, with a number of cases active, 2025 is still likely to be a busy year for shareholder litigation in the UK - expect more interim judgments and more shaping of the regime in the next 12 months.

Freshfields represents clients in section 90A and section 90 FSMA proceedings and is currently acting for defendants on a number of these claims.