After a 93-day trial (just over 18 weeks!), a 1,200 page judgment (excluding schedules and appendices) was published on 17 May 2022 by Mr Justice Hildyard. I only have experience of 10-day hearings and cannot imagine dealing with a 93-day trial nor the substantial costs involved.
This extensive judgment is the first on a claim brought under Schedule 10A/ section 90A of the Financial Services and Markets Act 2000, or FSMA.
Mr Justice Hildyard found in favour of the claimants who claimed that they were induced into acquiring Autonomy (a FTSE 100 software company headquartered in Cambridge) for $11.1 billion in 2011 by dishonest statements and omissions in Autonomy’s published information. The former CEO and CFO were both found to have made fraudulent representations about the financial performance of Autonomy from 2009 to 2011 which meant that the company was mis-sold and the claimants were deceived into paying more than it was worth. There was found to have been an $8.8 billion write down of Autonomy’s value.
Schedule 10A FSMA came into force on 1 October 2010 and applies to published information issued after that date. Section 90A (very similar to 10A) continues to apply to information published before that date. Schedule 10A makes provision for issuers of securities to pay compensation to persons who have suffered loss as a result of an untrue or misleading statement, or omission, in published information.
This statutory provision provides a useful framework to bring a claim which would otherwise be difficult to bring at common law. Claimants would have previously had to rely on the tort of deceit but this would require the issuer of the statement to intend that the recipient of the statement would rely on that statement whereas Schedule 10A does not require the issuer to intend that the recipient would rely on the statement in question. The court noted that such an intention would be difficult to establish in tort as documents such as annual reports are not intended to encourage potential purchasers of securities to invest, the reports are primarily to report to shareholders.
Quantum will be dealt with in a later judgment but no doubt will be significant.
"‘a 93-day trial which I believe may rank amongst the longest and most complex in English legal history"