No More “Standard” Split: What the Boohoo Decision Means for UK FSMA Securities Claims

For some time, a working assumption has emerged in UK securities litigation: that trials—particularly under sections 90 and 90A of the Financial Services and Markets Act—can be sensibly split, with key claimant issues like reliance and loss deferred to a later stage.

But a recent decision in California State Teachers’ Retirement System v Boohoo Group plc challenges that assumption. In a jurisdiction still developing and without a fully tried FSMA securities claim, there is no settled “orthodoxy” on case management. For claimants, lawyers, and funders alike, the implications are practical—and potentially significant.

Erso is frequently approached to invest in UK FSMA securities litigation cases, assisting investors who assert losses through shareholdings that lost value due to misstatements or omissions in public information published by the company.

The jurisdiction remains uncertain on several key areas, not least because to date there has been no final judgment on a s90 or s90A FSMA claim. Significant cases have either settled before trial or are moving slowly through the courts as satellite issues are litigated and appealed.

In recent years, splitting securities trials has become common. Claimants argue that preliminary hearings on issues such as standing and liability promote efficiency, with reliance and loss addressed only if those initial issues are proven. Claimant lawyers may view this deferral as the orthodox approach, while funders may favour early resolution of selected issues without committing the full case budget until those issues are decided in the claimant’s favour.

That assumption has now been challenged. Mr Justice Green decided that, in the absence of a fully determined securities case, parties should generally be ready to argue all aspects at a first trial—save perhaps quantum. “It is generally a better use of resources and case management to try as much as possible in one go.” Even where reliance and causation issues overlap, he determined reliance should be addressed at a first-stage trial, not postponed.

The case demonstrates there is no orthodox practice. Claimants should broadly be prepared to argue all issues at a first-stage trial, and funders should not assume a split trial will automatically occur. Early-stage strategic and economic considerations, including higher budget deployment, are essential when deciding to invest.

The message from Boohoo is clear: parties cannot rely on procedural assumptions in an evolving area of law. Courts may increasingly favour a comprehensive first trial, requiring fuller and earlier presentation of evidence and argument across multiple issues.

For claimants and advisers, this raises the bar on preparation from the outset. For funders, it sharpens focus on early-stage risk, cost exposure, and case strategy.

At Erso Capital, we see this not as a deterrent but as a shift. As the UK securities litigation landscape matures, disciplined case construction and realistic budgeting will be critical—not just to succeed at trial, but to secure investment in the first place.

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