The High Court has given the go ahead to around 550 investors to pursue Capita over losses they incurred when Arch Cru collapsed.
The claims - which lawyers Harcus Sinclair who are acting for the investors said could cost Capita £16m or more if successful - centre on the allegation that Capita failed in its role as authorised corporate director of the Arch Cru fund range.
The Arch Cru fund range was suspended in March 2009 by the then regulator the Financial Services Authority (FSA) following a warning that it could no longer trade due to pricing and liquidity issues.
At that time it was worth a total of £363.6m. Since then some assets have been sold off - at a heavy discount - and the remainder of the fund range has been valued at around just £66m.
Capita has been censured by regulator for its role in the downfall of the fund - but was neither fined nor made to compensate investors, due to its claim that it had no responsibility for the funds' underlying investments.
Investors are arguing that Capita owed them a common law duty of care to safeguard their money and that it failed in this regard.
They also claim Capita breached the regulator's rules around collective investment schemes, known as the COLL rules.
Capita has set up, in an FSA brokered deal along with Arch Cru depositories BNY Mellon and HSBC, a £54m redress scheme for investors.
Some investors have balked at this deal, which the FSA said would return 70% of their amount invested, a figure Capita said in July has plummeted to 61% - and could fall further.
Only those investors who have not accepted the Capita deal can join the legal fight against it.
The now regulator, the Financial Conduct Authority (FCA), has also forced advisers who recommended Arch Cru to contact those clients and ask them if they want a review of the advice. If they believe they were mis-sold the investment the advisers must offer them redress.
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000
Two roles created