Split trials have become a hot topic in securities claims brought under the provisions of the Financial Services and Markets Act 2000. In particular, the question of when the issue of reliance should be heard in section 90A / schedule 10A cases has proved to be rather knotty, with the conclusions of judges appearing to vary from case to case. The recent judgment in Various Claimants v Entain Plc [2026] EWHC 1622 (KB) is the latest on the subject, and sees reliance scheduled to be heard in the second of two trials, with considerable litigation burden consequently placed on the defendant.
The 'orthodox' approach
In a series of cases in the period 2022 to 2024 – including Various Claimants v G4S Limited [2022] EWHC 1742 (Ch), Various Claimants v Serco Group Plc [2022] EWHC 2052 (Ch), and Aabar Holdings SARL & Ors v Glencore Plc & Ors [2024] EWHC 1556 (Comm) - split trials were ordered, with defendant-related issues (i.e. those going to liability) to be addressed in 'trial one' and claimant-related issues, including reliance and causation, to be addressed in 'trial two'.
The reasons given for such a split included: the potential cost saving if a later trial or trials could be avoided by the claimants failing at a shorter first trial, or, if the claimants succeeded, by the parties reaching a settlement; the reduction of duplication or overlap of witness evidence; the outcome of the first trial narrowing the focus of the second; and the manageability of the trial for the trial judge.
It was acknowledged in these cases that potential unfairness to the defendant could arise from the primary burden falling on them at the first trial, but this concern was considered to be tempered by the provision of further information, disclosure, and potentially witness statements from sample claimants.
California State Teachers' Retirement System & Ors v Boohoo Group PLC [2026] EWHC 335 (Comm)
Despite a series of split-trial decisions all having pointed in the same, largely claimant-friendly, direction, this judgment, in February 2026, gave defendants some hope of a more even procedural split between first and second trials. The Judge, Green J, rejected any suggestion that there was an orthodoxy for reliance to belong in a second trial and treated the real question as whether there was any good reason to defer consideration of that issue.
Green J held that the starting point "should be, like in most other forms of litigation, that, save perhaps in respect of quantum, the parties should expect to have all aspects of the claim tried at a first trial". In particular, he warned that pushing claimant-side issues to a second trial could encourage complacency on the part of claimants, and stated that parties should expect to deal with reliance at the first trial wherever reasonable to do so. Interestingly, Green J's view appeared to be informed by the fact that there have been no concluded trials in previous cases: he noted that there was no evidence as to whether previous split trial decisions had ultimately worked, albeit he accepted that that might, in turn, indicate that the decisions had brought about settlement which he described as a "good thing".
Green J also placed focus on a fair and efficient trial process in line with the overriding objective, taking into consideration, amongst other things, the scale of the case, the practicality of different case management options, striking a fair balance between the parties, and fairly allocating court resources. He emphasised that in a case such as this, which is "considerably smaller" than other cases where reliance has been tried at trial two, there is "no good reason" for not hearing reliance at the first trial. Underlying these considerations was a broader point about the fundamental nature of the issue of reliance in the context of securities litigation: in short, it affects whether a large part of the investing market, particularly tracker funds, can bring claims.
Notably, Green J did not agree that dealing with reliance in the second trial would be likely to save costs overall: parties may in fact be more likely to settle before the first trial if they have more information about the other side's case and are able to assess its strength. Further, parties should be able to organise their evidence to determine issues of reliance at trial one and then, depending on the outcome, marshal whatever is needed to deal with any outstanding issues at the second trial.
Various Claimants v Entain Plc [2026] EWHC 1622 (KB)
If Boohoo gave defendants hope for a more even split between trials, that was short-lived. The June 2026 decision in Entain, coming just a few months after Boohoo, signals a return to splits in the claimants' favour in accordance with the earlier trend. The Judge, Trower J, agreed with the conclusion in Boohoo that "there is not a one size fits all" approach but, considering all the facts and circumstances of this case, ordered that questions of reliance, causation and certain issues of limitation all be deferred to a second trial.
The claimants had argued that there was a material risk of wastage of costs if reliance was to be heard in the first trial, particularly if the evidence in relation to reliance and causation had to address the full, broad range of potential counterfactual permutations resulting from the scale and duration of the alleged misconduct. Trower J agreed that the scale of the permutations should play a role in determining how the trial would be split and that limiting those permutations before hearing issues on reliance and causation should, in turn, narrow the scope of trial two by ensuring that evidence based on what might turn out to be the wrong counterfactual was not adduced. In addition, the likelihood of the same witnesses having relevant evidence which went to all of the issues of reliance, causation and quantum drew the line more clearly in the claimants' favour.
Direction of Travel and Practical Implications
Whilst there is no "one size fits all" approach to how issues in securities litigation should be split - and, importantly, defendants still have a shot at arguing for at least some claimant-side issues to be addressed at a trial one - it now seems clear that the Court will lean towards a split which tends to favour claimants (i.e. with all issues of reliance, causation and loss being hived off to a trial two). It appears that it is only where the scale of the proceedings is limited (e.g. in terms of the number of claimants and / or contested issues arising from the alleged misconduct) that the Court will consider it realistic to accommodate significant claimant-side issues in a trial one.
Both claimants and defendants alike must be alive to the risks and rewards of a split trial and carefully consider the prospects of achieving a split on their terms. The impact that the relevant split would have on the case should, of course, be weighed carefully as against the time and cost implications of pursuing or opposing it.
Claimants must remember that whilst a shorter and more limited trial one will likely significantly reduce the procedural burden on them in the short-term, the long-term burden will remain the same if the case proceeds to trial two, and there is no guarantee that settlement will be reached before the second trial (indeed, per Green J, the prospects of settlement could increase if there are more cards on the table at an earlier stage). Further, the costs of deciding how the issues should be split can be very high and may well end up falling at the feet of the claimants (or their funders).
For defendants, the implication of these judgments appears relatively clear: in a complex case, with multiple issues arising from a long period of alleged misconduct, the Court is likely to sympathise with claimants seeking an order that the issue of reliance be addressed at a second trial. Defendants should therefore carefully consider whether the cost and time implications of opposing such applications are worth it, and perhaps instead concentrate their efforts on how they might otherwise introduce balance in the proceedings, e.g. in the form of further information, disclosure and evidence from the claimants at an early stage.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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