Surge in third-party funding sparks wave in FTSE shareholder lawsuits
A surge in the availability of third-party funding has triggered a wave in speculative FTSE shareholder lawsuits as investors seek to cash in on claims of wrongdoing. Over the last year, multiple blue-chip names including gambling giant Entain, smoking tycoon British American Tobacco (BAT) and fast fashion retailer Boohoo have been summoned before the High [...]
The availability of third-party funding has led to an increase in speculative shareholder lawsuits against FTSE 100 companies, as investors aim to capitalize on claims of wrongdoing. High-profile companies like Entain, British American Tobacco (BAT), and Boohoo have faced group claims from law firms targeting institutional investors. The Competition Appeal Tribunal (CAT) has driven a strategic focus on originating large-scale, high-value cases with litigation funding becoming integral to dispute resolution departments.
Aymen Mahmoud, London managing partner of McDermott, stated that London's deep capital markets, sophisticated institutional investors, and developed disputes system have contributed to the growing trend. Since Entain, multiple FTSE 100 companies have seen new filings, with its deferred prosecution agreement (DPA) with the Crown Prosecution Service (CPS) being a focal point. The trial is expected to commence in 2029, pending the conclusion of related criminal trials involving former Entain executives between 2028 and 2029.
British American Tobacco is facing group lawsuits over alleged breaches of North Korean and US sanctions related to its former operations in the country. The High Court has seen claims from law firms Hill Dickinson, Stewarts Law, Fox Williams, and McDermott Will and Schulte on behalf of investors. Boohoo Group is also set for a trial in October 2027, with shareholders accusing the retailer of misleading or omitting crucial details about labour conditions in its UK supply chain.
The surge in cases has been facilitated by procedural clarifications resulting from an increase in the number of cases through the court system.
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