In July 2014, the Lord Chief Justice of England and Wales announced plans to closely review what can be done to meet the needs of court users in financial cases to ensure that the Courts “are providing… what the markets require by way of fast, efficient and economical dispute resolution”.
After an initial consultation (with a targeted list of consultees with experience of financial markets business), in January 2015 a working group was established to consider and develop proposals. The group published the Rolls Building Financial List Initiative Consultation Document on 7 May 2015, inviting comments on all aspects of the proposals. In short, it is proposed that new procedures are adopted to deal with the more complex and important financial markets cases, including the creation of a new specialist list (the “Financial List”). The key elements of the consultation paper are summarised below.
Summary of the initiative
The Financial List would be based on the existing procedures in the Commercial Court Guide and the necessary accompanying amendments to the Civil Procedure Rules have been published in draft.
Flexibility is one of the key aims of the initiative; parties will be able to access nominated judges and transfer cases into and out of the Financial List.
It is envisaged that this procedure would apply to claims which:
- relate 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 and settlement;
- require particular expertise in the financial markets; or
- raise issues of general importance to the financial markets.
For the first category of claims, the value should generally be more than £50 million or equivalent, however, it is proposed that there would be judicial discretion to determine on a case by case basis whether a claim below this value should be ordered onto the Financial List. This threshold is not intended to apply to the second and third categories.
Test case procedure
The proposals include a pilot scheme ‘market test case’ procedure, which is “designed to give the opportunity where appropriate to resolve market uncertainty issues at an earlier stage than is currently conventional”. This would be available where immediately relevant authoritative English law guidance is required.
A key feature of this scheme would be that issues can be brought before the court by parties with opposing interests without the need for there to be an actual dispute between those parties. It is suggested that in an appropriate case a relevant trade body or association may join as a party.
This mechanism for providing legal guidance to the market would be welcomed by an industry which places a premium on commercial certainty, and would allow UK financial markets law to adapt quickly to changes in the market.
Allocation of judges
Cases would be heard by ‘docketed’ judges, meaning that hearings would be before the same judge from the commencement of proceedings to the final trial (and any later hearings relating to enforcement).
The nominated Financial List judges would be specialists with experience of financial markets disputes, drawn from both the Commercial Court and the Chancery Division. The intention is also that market development seminars would be provided periodically by the Judicial College in conjunction with the Financial Markets Law Committee (which is a not-for-profit organisation established for the purposes of education and the advancement of the understanding of financial markets law).
The continuity that this system would offer to court users would be a significant advantage, in that it would minimise or avoid the need for a different judge to ‘read in’ and familiarise themselves with the case before each hearing.
Reactions to the proposals
In a keynote speech at the Commercial Litigation Association’s annual conference on 14 May 2015, Mr Justice Cooke (a Commercial Court judge) noted that the supposed driver for these proposals is the need for judicial expertise to deal with cases with a value of more than £50 million or involving financial markets in London, however, he considers that the necessary expertise already exists in the Queen’s Bench Division (particularly in the Commercial Court) and the Chancery Division. It seems that the Financial List may be a more efficient way of ensuring that those judges with such expertise are allocated the cases for which this is required.
In the same speech Mr Justice Cooke noted that overseas commercial courts, such as Singapore, Dubai and Qatar are developing as centres for international commercial litigation and arbitration, and that this may be a threat to maintaining the current volume of cases in the Commercial Court. The Financial List may go some way towards continuing to attract potential claimants to the world-leading English court system.
The Rolls Building is already the world’s largest dedicated business court and the consultation paper reiterates a commitment to continue “to meet the needs of the international financial community”. This initiative will further emphasise why the Courts of England and Wales offer the expertise and resources suited to resolving all complex international disputes.
The consultation closed on 29 May 2015. The consultation paper does not set out a suggested timeframe for implementation, and it will of course depend upon, amongst other things, the consultation responses. However, the working group has also circulated draft amendments to the Civil Procedure Rules (including a Practice Direction on test cases) and a guide to the Financial List, therefore if approved it seems the procedures could be put in place fairly quickly.