Fox Williams, a leading London law firm, filed a group litigation claim against Boohoo Group plc (“Boohoo”) on 17 May 2024 on behalf of institutional investors who suffered losses as a result of Boohoo’s alleged breaches of the Financial Services and Markets Act 2000.
The claim relates to Boohoo’s failure to disclose serious labour rights violations at its suppliers’ factories, which were exposed by The Sunday Times in July 2020 and November 2022 and by BBC Panorama in November 2023. The media reports exposed the mistreatment of workers, revealing that some workers were paid as little as £3.50 an hour, well below the minimum wage. Workers were also forced to work in unsafe and unsanitary conditions amid the Covid-19 pandemic.
Following the publication of the report by The Sunday Times on 5 July 2020, Boohoo’s share price plummeted. The second exposé by The Sunday Times and BBC Panorama have led Boohoo shares to further fall in value. Boohoo has long been aware of these issues, failing to keep to past promises of fair production.
Fox Williams, led by securities litigation partners Andrew Hill and Matthew Reach, is acting for a group of institutional investors who purchased Boohoo shares in the years leading up to The Sunday Times expose on 5 July 2020 and suffered losses as a result of the share price drop.
The claimants allege that Boohoo made untrue or misleading statements and/or failed to disclose or delayed the disclosure of material information to the market, in breach of its obligations under the Financial Services and Markets Act 2000. The claimants 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.”
Anisha Patel, senior associate at Fox Williams, commented: “The claim represents an opportunity for investors in Boohoo to recover substantial compensation, but also to discharge their stewardship obligations to support robust governance standards across supply chains in the ‘fast fashion’ sector. We hope that, by launching claims such as these, investors are able to incentivise UK public companies to improve the governance of working conditions and to reduce “blue-washing” in the fashion industry.”
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