Liability For Misleading Or Untrue Statements: ACL Netherlands BV v Lynch

In an historic first, the High Court has delivered a judgment on liability arising from a breach of s 90A and schedule 10A, Financial Services and Markets Act 2000 (FSMA) in the case of ACL Netherlands BV & Ors v Lynch & Anor  [2022] EWHC 1178 (Ch). These provisions impose liability on issuers of securities to pay compensation to persons who have suffered loss as a result of misleading or untrue statements made by the issuer. Two conditions of liability must be met: (i) that a person discharging managerial responsibility (PDMR) within the issuer knew that the statement was untrue or misleading; (ii) that the claimant reasonably relied on the statement.

As it is the first decision on the merits of such a claim, it is one of the most important judgments in recent times for fraud and financial services lawyers. Running to 1,657 pages, it is also one of the longest judgments ever published by the High Court.