High Court considers appropriate split for trial of s.90 and 90A FSMA claims in Entain litigation

In a securities class actions brought against Entain Plc under ss. 90 and 90A of the Financial Services and Markets Act 2000 (FSMA), the High Court has held that issues of reliance and causation, and certain limitation issues, should be held over to a second trial to be determined together with the quantification of loss. The first trial will therefore be limited to "defendant-side" issues, as well as issues relating to the individual claimants' standing to bring the claims: Various Claimants Listed in the Schedules to the Claim Forms v Entain Plc [2026] EWHC 1622 (KB).

The decision emphasises that the questions of whether there should be a split trial, and if so the appropriate split, depend on a wide range of considerations. There is no "one size fits all" approach, and little definitive guidance can be gained from other cases.

The court noted that part of its duty to further the overriding objective by actively managing cases is to deal with as many aspects of the case as possible on the same occasion, and so the "obvious starting point" is that all issues should be tried at a single trial. However, that must be balanced against other factors including questions of costs, practicality and the efficient and proportionate preparation of witness evidence.

The court also commented that those who choose to bring civil claims, particularly those valued in the billions, must be ready, willing and able to establish those claims, and not assume that they will be able to defer dealing with "claimant-side" issues such as reliance and causation because they are likely to be hived off to a second trial. In this case, although the court ultimately found that reliance and causation should be determined at a second trial, it ordered all the sample claimants to give disclosure (but not produce witness statements) on those issues before the first trial. This, it said, would strike the appropriate balance between, on the one hand, minimising wasted costs and, on the other, minimising delay and ensuring the whole litigation burden did not fall on the defendant in the early part of the proceedings.

Background

124 claimants, in two separately represented groups, are bringing claims against the defendant under ss. 90 and 90A of FSMA relating to alleged historic misconduct involving a failure to prevent bribery in connection with its business in Turkey. The claims allege that: the defendant's published information and prospectuses contained misleading statements and/or omissions of relevant information, with the knowledge of persons discharging managerial responsibilities (PDMRs) of the defendant; the claimants relied on those statements or omissions in acquiring, holding or selling their shares; and they suffered loss as a result.

Due to the risk of compromising the conduct of related criminal proceedings, the trial of these claims will not commence before May 2029 (and see our blog post here in relation to the Filing Modification Order made in this case).

It was agreed that sample claimants should be chosen to advance their cases on the claimant-side issues of reliance, causation, limitation and loss. It was also agreed that there should be a split trial, with trial one addressing issues relating to the claimants' standing as well as the defendant-side issues (ie the existence and/or extent of any misstatements or omissions, PDMR knowledge, and whether the claims were based on the defendant's fraud or there was deliberate concealment for the purposes of s.32 of the Limitation Act 1980) and trial two addressing the quantum of any loss. 

There was a dispute, however, as to when issues of reliance and causation and the remaining limitation issues (including when the claimants could with reasonable diligence have discovered any fraud or concealment) should be tried – the defendant arguing that they should form part of trial one and the claimants that they should be held over to trial two.

Decision

The High Court (Trower J) held that reliance and causation should be tried as part of trial two, but that all sample claimants should give disclosure before trial one in respect of almost all issues to be determined at trial two.

The court's approach in principle

The judge noted that, where an order for a split trial is sought, there will always be a wide range of considerations for the court in determining how to proceed, and little definitive guidance can be gained from other cases beyond the general factors to consider. Not every case under ss. 90 and 90A had reached the same conclusion on the appropriate split and it was "important to emphasise that the right answer in each case will be dictated by its own facts and circumstances". However, the approach in some of the cases was "illuminating, even if not directly transferable to the current proceedings".

In a case against Tesco, only quantification of loss was left to the second trial, but in claims against RSA, G4S, Serco and Glencore, issues of reliance, causation and loss were all deferred. In a claim against Standard Chartered, a similar approach was taken, save that so-called common or price reliance (as opposed to individual reliance) was to be tried together with the defendant-side issues at trial one. In a claim against Barclays, reliance and causation were to be dealt with at trial one and, in the case against Boohoo, reliance was directed to be determined at trial one, with causation and loss left to trial two.

The defendant was right to draw attention to the fact that part of the court's duty to further the overriding objective by actively managing cases is to deal with as many aspects of the case as it can on the same occasion. That consideration weighed heavily in the claims against Barclays and Boohoo and, the judge said, it was plainly an important consideration in this case as well.

The judge also agreed that it was not wholly accurate to say that it was "orthodox" in these types of case to have a split trial or for the issue of reliance to be split off. It was more accurate to say that the nature of these cases, particularly where there were large claimant groups and the period under examination was lengthy, meant that a split trial along those lines may turn out to be the most appropriate option. Nonetheless, the judge said, the varied conclusions reached in the different cases showed that "this is not an issue in which one size fits all". 

The appropriate split in this case

Having summarised the parties' submissions, the judge said he agreed with the defendant that claimants who choose to bring civil claims, particularly those valued in the billions, should only do so if they are ready, willing and able to make good the cause or causes of action which they plead – ie they should not do so safe in the knowledge that they will be able to defer dealing with claimant-side issues such as reliance and causation. 

However, the judge accepted the claimants' argument that, in circumstances where the alleged statements and omissions occurred over a significant period, the parties and the court would have to deal with a large number of different permutations if issues of reliance and causation were to be dealt with at trial one – rather than waiting until after the court had determined what (if any) misleading statements or omissions were made with PDMR knowledge. 

The judge also considered that in this case, and others like it, there was a very close correlation between causation and quantum, which more naturally pointed to determining issues of causation and reliance at the same trial as quantum. The inquiry as to what a claimant did in reliance on any misstatement or omission (if established) was likely to be "intimately interrelated" to what they would have done if not for the misstatement or omission, and to the impact on the claimant. Some of the same documentation and witness evidence was likely to be relevant to all of these issues. 

It followed that questions of costs, practicality and the efficient and proportionate preparation of witness evidence all pointed to the claimants' proposed split, even though that ran counter to the "obvious starting point that all issues should be tried at a single trial".  

Directions for trial two preparation

The judge also made directions as to the preparatory work for trial two which was to be conducted before trial one – with the aim of minimising wasted costs, while at the same time minimising delay before trial two and ensuring the whole litigation burden did not land on the defendant in the early part of the proceedings.

He concluded that the right balance was for all sample claimants to give disclosure on all issues (apart from the potential alternative investments they would have made) before trial one. However,  the judge directed that they should not produce witness statements on reliance, causation, limitation and loss until after trial one, as that would cut across some of the cost control benefit of the proposed split - though he left the door open for the parties to revisit the timing for service of witness statements on trial two issues if, later on in their preparations for trial one, they considered it would accord with effective case management to do so.