A High Court judge has approved a £230mn settlement scheme for investors trapped in the failed Woodford fund, five years after it closed.
However, campaigners are now considering appealing the judgement, published by Justice Jonathan Richard today (February 9).
His ruling reads: “Having considered the matter in detail, I see no reason to gainsay the conclusion of the overwhelming majority of scheme creditors at the court meeting. I will sanction the scheme.
“Some objecting creditors argued that I should make any sanction of the scheme conditional on the Financial Conduct Authority being required to make an order requiring others involved in the fund (such as its investment manager) to top up the amount that investors received.
“I doubt my power to make such an order, but even if I had that power, I would not exercise it.”
In a meeting following the publication, Andy Agathangelou, founder of the Transparency Task Force, said he was disappointed by the decision. He said that not all of those affected by the fund’s collapse voted for the compensation scheme.
The scheme was approved in December by around 94 per cent of those with money in the fund who voted.
The FCA said it would return 77 per cent of the money trapped in the fund when it closed in 2019.
However, this figure is disputed by the Transparency Task Force.
Agathangelou said: “What will happen, in all sincerity, if somebody voted for the scheme, on the basis that they believe they will get 77p in a pound.
“When they get the compensation check, they think it could be the first instalment when that is actually the whole lot, what would such a person, do?”
Agathangelou said the group is considering appealing the judge's decision, the deadline for appeal closes at 4pm on February 23.
Link, the fund's administrator, previously confirmed if the scheme was sanctioned by the court it would make its first payment from the settlement fund by March 31, expected to be between £183.5mn and £200mn.
Link was responsible for monitoring and supervising the investments executed by Neil Woodford’s eponymous fund before it failed in October 2019.
In November 2022, Link’s figures showed there was £50mn still in the fund after £2.56bn was sent to investors through five payments.
In April 2023, the FCA announced that Link made ‘critical errors and mistakes’ which ‘caused significant losses for those investors who remained in the fund when it was suspended’.
Link is expected to release a statement on the update later today.
tara.o'connor@ft.com
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