The Financial List has been operating since October 2015 and is now becoming well-established. In Property Alliance Group Limited v Royal Bank of Scotland Plc [2016] EWHC 207 (Ch), the Court considered whether to order the transfer of existing proceedings into the Financial List.

The application for a transfer was brought by The Royal Bank of Scotland Limited (RBS) and opposed by Property Alliance Group Limited (PAG). PAG has brought various claims against RBS in these proceedings. The key allegations relate to the mis-selling of interest rate swaps and the fixing of LIBOR rates.

What disputes are eligible for the Financial List?

Claims suitable for the Financial List are:

  • claims worth £50 million or more and relating to loans, project finance, banking transactions, derivatives and complex financial products, financial benchmarks, capital or currency controls, bank guarantees, bonds, debt securities, private equity deals, hedge fund disputes, sovereign debt, or clearing or settlement, or
  • claims which require particular expertise in the financial markets or raise issues of general importance to the financial markets. Financial markets include the fixed income markets, the equity markets, the derivatives markets, the loan markets, the foreign currency markets and the commodities markets.

Read our earlier article which contains more information on the Financial List here.

PAG accepted that its claims fell within the definition of a Financial List claim. However, it argued that this did not mean the case must be transferred, especially in circumstances where there was already a judge docketed to the case who had delivered a number of judgments (mostly in relation to disclosure and privilege). In addition, the hearing was only a few months away.

Ten significant factors

The judge listed the following factors as being relevant to deciding a contested application for a transfer to the Financial List:

  1. The extent to which the case concerned matters of market significance, rather than matters relevant only to the specific case and parties.
  2. The relative importance of the issues of market significance.
  3. Whether the case had already been assigned to a judge.
  4. Whether, if the case were to be transferred to the Financial List, the judge would have to be changed.
  5. How long proceedings had been underway.
  6. Whether the assigned judge had already conducted hearings and delivered judgments in the proceedings.
  7. Whether the judge’s familiarity with the case would enable their pre-reading to be more efficient than if a new judge were to be appointed.
  8. Proximity of the trial date.
  9. Whether the timetable would be disrupted by a transfer to the Financial List.
  10. Whether assigning a Financial List judge would disrupt other proceedings underway in other lists, for example because that judge would no longer be able to conduct those proceedings.

He concluded that this was an appropriate case to be transferred, even though it would involve a change of judge. The fact that some of the allegations were relevant to other participants in the market, the judgment would impact on cases currently underway and the case might be viewed as a lead case in relation to LIBOR allegations were all relevant issues.

Comment

It should be fairly unusual for an application to transfer a claim into the Financial List to be opposed. The financial markets expertise of the judges of the Financial List will generally appeal to both sides in a dispute. Where there is opposition (for example because there are tactical considerations at play), this case provides useful guidance on how the Court will reach a decision. That said, not every case which meets the criteria of the Financial List needs to be transferred or started there. A high value but straightforward loan dispute, for example, probably does not require particular financial market expertise.

Applications to transfer to the Financial List should be made as early as is feasible. The Courts will not want to jeopardise a fixed trial date and will also want the same judge to conduct both the pre-trial review and the trial itself. If an application is being made at a later stage, assurances that the trial date will still be met are likely to give comfort to the judge considering the case.