Two new initiatives came into force in the High Court on 1 October 2015, both of which are designed to promote London as a key forum to hear financial disputes, namely:
- The introduction of the new Financial List (within which a new Financial Markets Test Case Scheme will be piloted); and
- The Shorter Trials Scheme and the Flexible Trials Scheme;
on which we comment further below.
The Financial List
On 1 October 2015, a new Financial List became operational in London’s High Court. Cases will be heard either in the Commercial Court or the Chancery Division and its procedures are based on the existing Commercial Court rules. The introduction of the Financial List reflects both the large volume of recent cases occupying the court and the expectation that this trend will continue.
The purpose of Financial List is to provide a specialised forum within which to deal with complex domestic and international financial claims or those over £50 million. These claims inevitably require particular expertise and therefore claims will be assigned to a specific judge experienced in financial issues who will deal with the matter from start to finish.
The Financial Markets Test Case Scheme will test "issues of general importance to the financial markets in relation to which immediately relevant English law guidance is needed". In such cases, there need not be a cause of action; a hypothetical issue affecting the markets will suffice. In cases of urgency or particular importance, the proceedings may be heard by two judges.
The three principal reasons for the introduction of this initiative is to:
- promote access to the Courts and expertise of trial judges in an area important to both the UK economy and international markets;
- help provide the necessary environment for economic activity to thrive and to avoid costly and time consuming litigation by the provision of a test case procedure providing authoritative guidance before disputes have arisen; and
- promote the UK courts both nationally and internationally.
According to a press release from the Courts and Tribunal Judiciary dated 21 October 2015, the first case has already been transferred onto the Financial List and is in the course of being tried by Mr Justice Blair.
Shorter and Flexible Trials Pilot Scheme
A two-year pilot Scheme for Shorter and Flexible Trials also came into force on 1 October 2015. The Shorter Trials Scheme will provide an accelerated procedure for straightforward cases with the aim of providing a substantive judgment approximately a year after commencement. The Flexible Trials Scheme will allow parties to elect into a simplified procedure which is again aimed at providing a speedier and more cost effective result.
The Scheme will run in both the Commercial Court and the Chancery Division, with the aim of getting to trial more quickly and at a reasonable and proportionate cost. The aim of both proposals is to offer flexibility where parties might otherwise be referred to arbitration and to achieve quick but fair justice.
The Shorter Trials Pilot Scheme is aimed at resolving relatively simple disputes and will not normally be suitable for cases involving fraud or dishonesty. For example, there will be no general disclosure obligation, interim applications will be on paper rather than in an oral hearing and parties will be encouraged to agree witness and/or expert evidence. Further, there is also no obligation to file a costs budget and the maximum length of a trial will be limited to four days. A defendant may apply to transfer the case out of the scheme if it considers it is no longer an appropriate forum.
The Flexible Trials Pilot Scheme is a voluntary scheme aiming to provide flexibility and choice for the parties. It provides a simplified and expedited procedure where parties are encouraged by agreement to adapt court procedures for example limiting disclosure and confining oral evidence given at trial to a minimum. If parties wish to adopt this scheme, they must agree to do so before the date of the first CMC.
It is clear that the English courts recognise the importance of financial services to the UK economy and are willing to develop and evolve in order to meet the needs of the business community. In the face of competition from arbitration and from other jurisdictions, the Financial List and Pilot Schemes will enhance the courts’ international status as a "flexible and certain" forum in which to resolve financial disputes.
How the Courts will construe an issue of "general importance" or a claim requiring “particular expertise” for the purposes of the Financial List remains to be seen. Whether parties will utilise the pilot schemes is also unknown, but these initiatives attempt to address some of the many criticisms which have been made against the civil justice system in England and should be welcomed.