Ryan FowlerFox Williams, a leading London law firm, has filed a group litigation claim against Boohoo Group plc on behalf of institutional investors who suffered losses due to Boohoo’s alleged breaches of the Financial Services and Markets Act 2000. The claim, filed on 17 May 2024, centres on Boohoo’s failure to disclose serious labour rights violations at its suppliers’ factories.
The Sunday Times and BBC Panorama exposed these violations in reports from July 2020, November 2022, and November 2023. The reports revealed that some workers were paid as little as £3.50 an hour, well below the minimum wage, and were forced to work in unsafe and unsanitary conditions during the Covid-19 pandemic. Following these revelations, Boohoo’s share price significantly dropped.
Fox Williams, led by securities litigation partners Andrew Hill and Matthew Reach, represents a group of institutional investors who purchased Boohoo shares before the initial exposé on 5 July 2020 and suffered losses from the subsequent share price fall. The claimants allege that Boohoo made untrue or misleading statements and failed to disclose or delayed the disclosure of material information, breaching its obligations under the Financial Services and Markets Act 2000. They seek to recover damages for their losses, as well as interest and costs.
Andrew Hill, partner at Fox Williams, said: “This is a landmark case that will test the legal framework for securities litigation in the UK and the role of environmental, social and governance (ESG) factors in corporate governance and disclosure. Boohoo is a prominent example of a company that failed to live up to its ESG responsibilities and caused significant harm to investors. We believe that our clients have a strong case for compensation.”
The claim provides an opportunity for investors to recover substantial compensation and discharge their stewardship obligations to support robust governance standards in the ‘fast fashion’ sector. Fox Williams aims to incentivise UK public companies to improve the governance of working conditions and reduce “blue-washing” in the fashion industry.
