Serco settles landmark lawsuit linked to overcharging scandal
Serco Group has settled a landmark lawsuit with a group of institutional investors linked to a historic overcharging scandal.
Last Monday, institutional investors, including Allianz and Russell Investments, appeared in court for the first day of a High Court trial, which is linked to a 2013 scandal where it was accused of overcharging for the delivery of electronic tagging and prisoner escort services. News of the scandal led its share price to collapse by as much as 70 per cent at the time.
After it came out, Serco agreed to repay £68.5m to the UK government for overcharging to tag criminals.
The scandal was eventually referred to the Serious Fraud Office, and in 2019 it was forced to pay a £19.2m fine as part of settlement with the prosecutor, known as a deferred prosecution agreement.
Several lawsuits were then filed against the company between 2019 to 2021, who were seeking compensation for the collapse in the value of their shares at the time the scandal emerged.
After years of waiting, the trial kicked off last week, but it was revealed today that Serco had settled with the shareholder group.
Serco, which had instructed magic circle firm Clifford Chance for the case, declined to disclose the terms of the settlement.
Law firm Morgan Lewis, who instructed the shareholder group, was contacted for comment.