Various Claimants v Barclays Bank Plc
| Jurisdiction | England & Wales |
| Judge | Mr Justice Leech |
| Judgment Date | 02 August 2023 |
| Neutral Citation | [2023] EWHC 2015 (Ch) |
| Court | Chancery Division |
| Docket Number | FL-2020-000051 |
[2023] EWHC 2015 (Ch)
Mr Justice Leech
FL-2020-000051
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
FINANCIAL LIST (CH D)
Mr Jonathan Nash KC and Mr Alex Barden (instructed by Signature Litigation LLP) appeared on behalf of the Claimants.
Mr Michael Watkins and Mr Tom Foxton (instructed by Latham & Watkins (London) LLP) appeared on behalf of the Defendant.
Hearing dates: 11–13 July 2023
APPROVED JUDGMENT
This judgment was handed down remotely at 2 pm on 2 August 2023 by circulation to the parties or their representatives by email and by release to the National Archives.
I. The Applications
By Application Notice dated 15 February 2023 (the “ First Application”) the Claimants apply for permission to amend the Claim Form and Particulars of Claim to amend the names of a number of individual Claimants and, in a number of cases, to substitute new parties for existing Claimants under either CPR Part 17.4 or CPR Part 19.6. By a second Application Notice dated 9 June 2023 (the “ Second Application”) the Claimants apply for permission to amend the Claim Form and Particulars of Claim to amend or substitute a number of additional Claimants.
The factual background to the applications can be briefly stated as follows. The Claimants' case is that they are investors who acquired, continued to hold or disposed of ordinary shares in the Defendant, Barclays Bank plc (the “ Bank”), which is listed on the London Stock Exchange. Some of them also claim to have acquired those shares in a rights issue in September 2013 in which the Bank raised approximately £5.8 billion as additional share capital (and they rely on a prospectus issued on 16 September 2013).
On 26 June 2014 the Bank issued an RNS stating that the Attorney General of the State of New York had filed a complaint in the New York State Courts relating to his investigation of “LX Liquidity Cross” which was the Bank's alternative trading system (the “ Complaint”). On 31 January 2016 the Bank and Barclays Capital Inc (“ Barclays Capital”), one of its subsidiaries, entered into a settlement agreement with the Attorney General of New York and submitted to an order (the “ SEC Order”) made by the Securities and Exchange Commission (the “ SEC”).
On 28 May 2020 Financial Recovery Technologies LLC (“ FRT”), which described itself as a “Leader in Securities Litigation”, published a circular on its website headed “Case Spotlight: Barclays Plc”. It identified the Bank and stated that it was organising claims relating to “Misleading or untrue statements in published information and violation of disclosure requirements”. It then stated that the limitation period expired on 25 June 2020 and that the deadline for participation in the claims was 1 June 2020 before providing the following background:
“Organizers are currently investigating a potential recovery effort for investors against Barclays plc (Barclays) claiming the firm grew market share for its dark pool securities trading facilities, called LX Liquidity Cross (LX), through misrepresentations about how, and for whose protection and benefit, they were operated. On June 25, 2014, the New York State Attorney General (AG) issued a press release about its lawsuit against Barclays and Barclays Capital Inc. (Barclays Capital), the entity through which Barclays operates in the US. In its suit, the AG claimed that contrary to Barclay's public statements about safeguards to protect clients from predatory high frequency traders, it actually operated the dark pools for its own benefit. The press release caused the price of Barclay's London exchange listed shares to fall £0.13 per share, wiping out more than £2.08 billion in market capital.”
Under the heading “Eligibility & Costs” FRT continued that in order to participate in the action, investors had to have held shares at market close on 25 June 2014 or to have purchased them during the September 2013 rights issue and held some of them until 25 June 2014. FRT then set out the terms on which a funder called Woodsford was prepared to fund the litigation and then answered the question “Why is there a tight deadline?” as follows:
“Brown Rudnick only recently brought this matter to Woodsford. The deadline is a hard one due to an expiring limitations period – the legal time limit for filing claims. UK law requires certain claims to be filed within 6 years after investors knew or reasonably should have known of the wrongdoing. The Organizers are starting the six years from the June 25, 2014 press release by the AG.”
Finally, the circular stated that the organisers were preparing a two phase strategy which required investors to provide the following information:
“ Phase 1: This first stage will focus on preserving claims – i.e. preventing them from expiring on June 25, 2020 – by attempting to negotiate an early,
out-of-court settlement. This may involve entering into a standstill or tolling agreement with Barclays, suspending the limitations clock, or filing
claims in court to ‘perfect’ them (stopping the clock) but delaying serving the complaint on Barclays.
Phase 2: If the first stage fails to produce a settlement, the Organizers will file claims in court – if they have not already done so during Stage 1 – and serve the complaint on the Barclays and litigate to resolution.
In Phase 1, you will need to provide trade records and proof of your legal or beneficial ownership of them. Proof of reliance may also be required for settlement negotiations. Woodsford has not set a participation on threshold for Phase 1. However, it will only proceed to Phase 2 if certain conditions are met including a group participation rate by claimants totalling 650 million eligible shares.”
On 6 June 2020 Brown Rudnick LLP (“ Brown Rudnick”) served a letter of claim (the “ Letter of Claim”) on the Bank addressed to its board of directors and also its Head of Investor Relations. Brown Rudnick stated that they represented the clients set out in Appendix 1 and summarised the nature of the claim as follows:
“Our clients dealt in Barclays Shares in reasonable reliance on information published by Barclays and suffered loss as a result of untrue and/or misleading statements and/or omissions in such information between 1 January 2011 and 1 February 2016 (the “ Relevant Period”), and/or have suffered loss as a result of Barclays' dishonest delay in publishing such information. Accordingly, those clients have claims against Barclays pursuant to inter alia section 90A of the Financial Services and Markets Act 2000 (“ FSMA”), in respect of the matters more particularly described below.”
The Letter of Claim provided detailed particulars of the claims under section 90 and section 90A of FSMA based primarily upon the Complaint, the settlements between the Bank, Barclays Capital, the New York Attorney General and the SEC. In Appendix 1 Brown Rudnick identified 88 potential Claimants for whom they acted and they also invited the Bank to enter into a standstill agreement (and enclosed a draft).
By an agreement dated 25 June 2020 (the “ Standstill Agreement”) and made between the parties referred to in the Schedule (who were defined as the “ Proposed Claimants”) (1) and the Bank (2) the parties agreed to stop time running for limitation purposes. In clause 2 (which was headed “Agreement to suspend time”) the parties agreed as follows:
“2.1 In consideration of the Proposed Claimants agreeing not to issue or serve proceedings in respect of the claims identified in the Letter Before Action against any current or former Barclays director, the Parties hereby agree that: (a) as regards the Proposed Claimants, for all purposes of any Limitation Defence, time will be suspended during the Period; and (b) Barclays will not raise any Limitation Defence against the Proposed Claimants or any of the Proposed Claimants that relies on time running during the Period.
2.2 The suspension of time under this agreement shall continue in force until the earlier of: (a) Four (4) weeks after service of notice by either the Proposed Claimants or Barclays, stating that the running of time is to recommence; (b) the service of legal proceedings on Barclays in connection with the Dispute (whether by way of issuing new proceedings, joinder to existing proceedings, amendments to statements of case incorporating the addition or substitution of a new cause of action or new party and/or parties, third party proceedings or otherwise); or (c) 29 January 2021.”
The schedule to the Standstill Agreement now identified 122 Proposed Claimants. But in Clause 1.9 the parties also agreed that any party with the right to bring the claims set out in the Letter of Claim for, or on behalf of or in the place of the Proposed Claimants, would be entitled to the benefit of the Standstill Agreement. Mr Nash and Mr Watkins both used the term the “ Claimant Universe” to describe all of these potential Claimants and I adopt that term myself. Clause 1.9 provided as follows:
“This agreement shall be binding on, and enure to the benefit of, the Parties to this agreement, their respective personal representatives, successors and permitted assigns, and any party with the right to bring any of the claims set out in the Letter Before Action for, on behalf of or in place of the Proposed Claimants. References to any Party shall include that Party's personal representatives, successors or permitted assigns, and references to the Proposed Claimants shall include any party with the right to bring any of the claims set out in the Letter Before Action for, on behalf of or in
place of a Proposed Claimant. Additional Proposed Claimants may become parties to this Agreement by...
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