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Tesco DPA shifts landscape for shareholder redress

March 29, 2017, Commercial Dispute Resolution

Ian Hargreaves is quoted in a Commercial Dispute Resolution article regarding the UK Serious Fraud Office’s deferred prosecution agreement with Tesco PLC for false accounting practices. According to Hargreaves, the FCA compensation scheme is of particular interest. “Although we are not privy to the details of the compensation package offered to shareholders and bondholders and how this overlaps (if at all) with the civil claims and the claimants bringing those claims, it may nullify or significantly reduce such claims in compensating those who have a claim in damages against Tesco,” he says. “We understand the FCA is not imposing a fine in return for the compensation package being agreed and the litigation against Tesco may now be significantly reduced and/or compromised on the basis of the package,” which reduces Tesco’s exposure to significant further legal costs both in relation to its own costs and those of claimants.

Hargreaves adds that the SFO’s fine is not insignificant, “but if it and the compensation package can bring this matter to a conclusion now or at least narrow the issues/claims in the civil cases, it will be well worth it.”

 

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