In Industry News, Opinion

Introduction

In an interesting development for financial disputes funding, the new Financial List – a specialist list set up in the High Court to handle complex claims relating to the financial markets – became operational on 1 October 2015. Each case in the Financial List is to be managed and heard by a dedicated judge with specialist expertise. Claimants and funders involved in financial disputes funding alike will be interested to see how the Financial List operates in practice. If it lives up to its promise, the efficiency and quality of the Court process will improve for eligible claims, bolstering the High Court’s standing as the preferred jurisdiction for complex financial litigation and further enhancing the confidence of Balance Legal Capital in its financial disputes funding commitments. Our specialist financial disputes funding team welcomes this development.

How will the Financial List work?

Eligible claims can now be transferred in (and out) of the Financial List at the request of the parties or at the initiative of the Court. Eligible claims are those of over £50m, often most appropriate for financial disputes funding, which principally relate to certain (domestic or international) financial markets, or claims of any value which require particular expertise in, or raise issues of general importance to, financial markets. Claims principally relating to financial markets include those relating to loans, project finance, banking transactions, derivatives and complex financial products, financial benchmarks, bonds, debt securities, private equity deals, hedge fund disputes, sovereign debt, or clearing and settlement (see CPR 63A).

In the experience of Balance Legal Capital’s own financial disputes funding team, this area of legal practice in particular benefits from specialist judges, with a tight grasp on the unique technicalities and terminology inherent to many financial disputes. From a financial dispute funding perspective, it is therefore greatly encouraging to note that cases in the Financial List are to be managed and heard by specialist judges with suitable expertise and experience, with the aim of providing “fast, efficient and high quality dispute resolution of claims related to the financial markets” (para 1.2, the High Court’s Guide to the Financial List).  The intention is that the same (specialist) judge will be responsible for a case throughout the proceedings. At present, 12 judges from the Commercial Court and Chancery division have been nominated to hear Financial List cases. The judge is to be allocated at the first CMC, and before allocation the parties will have an opportunity to indicate any particular feature of expertise that may be advantageous for their proceedings (although they cannot request a specific judge).

The procedural code for the Financial List will be that of the Commercial Court Guide (subject to some limited adjustments), together with the CPR, reflecting the fact that the procedure is intended to fit seamlessly with existing (tried and tested) procedure.

Comment

It will be interesting to see how many parties choose to commence proceedings in the Financial List, particularly given anecdotal reports regarding the limited uptake of competing financial dispute resolution forums such as arbitration under the PRIME Finance Rules. If the Financial List is able to deliver the procedural efficiency and improved case management and decision making that it promises, then it will prove an attractive option for eligible cases and for financial dispute funding, whilst also enhancing the High Court’s international standing as a forum for the resolution of complex financial disputes. From a claimant and funder’s perspective, the availability of a dedicated, specialist judge to oversee a case from start to finish is an appealing development, as it could bring an increase in certainty with regards to the outcomes of the litigation process. Given these potential benefits, it is a shame that the reforms could not have included the City of London Law Society’s recommendation that eligible claims begin at £10m rather than £50m.

  • Oliver Hayes
    Oliver Hayes Partner

Oliver Hayes is a consultant at Balance Legal Capital LLP, a provider of third party funding for international arbitration and litigation, headquartered in London, UK. Prior to joining Balance, Oliver was an associate in the dispute resolution team at Freshfields Bruckhaus Deringer LLP, specializing in contentious matters in the financial services sector.