On the Horizon

Welcome to the second edition of the On the Horizon newsletter - a regular update on upcoming cases and anticipated regulatory developments by the DLA Piper Banking and Finance Litigation team.

AUTUMN 2016

Cases to watch

  • Taberna Europe CDO II plc v Selskabet AF1 (in bankruptcy) – can a party who purchases subordinated loan notes in the secondary market from a third party claim directly against the issuer for misrepresentation? Due to be heard by the Court of Appeal on 8 or 9 November
  • Metlife Seguros De Retiro S.A. v JP Morgan Chase Bank, National Association – how should recalculation provisions in CER linked Notes be interpreted? Had a CER Event occurred so as to oblige the Calculation Agent to re-determine the CER? Due in the Court of Appeal on 22 or 23 November

Regulatory developments

  • The new National Cyber Security Centre is now open
  • The FCA is to invite applications to be in the second cohort of users of the Regulatory Sandbox from November 2016. The application process will remain open until mid-January 2017
  • Comments on HM Treasury’s consultation on implementation of the Fourth Money Laundering Directive ((EU) 2015/849) and those aspects of the revised Wire Transfer Regulation ((EU) 2015/847) which need to be transposed into national law are due by 10 November
  • The European Central Bank’s consultation on draft guidance as to how banks should tackle non-performing loans closes on 15 November
  • Final decisions on the results of the 2016 Stress Test will be made by the FCP and the PRA board on 29 November and fed back to the firms involved. The results will be published alongside the Financial Stability Report on 30 November

WINTER 2016

Cases to watch

  • Thornbridge Ltd v Barclays Bank plc – swaps mis-selling claim – appeal due to be heard by the Court of Appeal on 30 November or 1 December. At first instance the court ruled that the bank had not taken on an advisory role and, even if it had, the borrower was estopped from asserting that it had due to a non-reliance clause in the swap confirmation. This clause was a “basis clause” not an exclusion clause which would be subject to UCTA. The bank was only obliged to ensure that the information it provided was accurate and not misleading, not that it was full, accurate and proper. It is not clear which of these findings is being appealed
  • BPE Solicitors and Anor v Hughes-Holland – solicitor’s professional negligence claim – scope of duty when drawing up a loan agreement – were the losses suffered within the scope of the solicitor’s duty and caused by a breach of that duty? Appeal to be heard by the Supreme Court on 14 and 15 December
  • JSC BTA Bank v Mukhtar Ablyazov & Anor – can an accomplice who helps a defendant breach a worldwide freezing order (and thereby places himself personally in contempt of court) be sued for conspiracy to injure by unlawful means? If so, will the English court have jurisdiction over the claim on the basis that England was the place where the conspiracy was implemented? Due in the Court of Appeal on 19 or 20 December
  • Hockin & Others v RBS and Anor – swaps mis-selling – advisory duty - LIBOR manipulation – Tomlinson claim – breach of implied duty to act in good faith – unlawful means conspiracy – this case is currently due to go to trial for five weeks starting in January 2017

Regulatory developments

  • Investment and corporate banking - the FCA is consulting on plans to ban future service restriction clauses which seek to limit clients’ choice of bank on future transactions. The consultation closes on 16 December 2016 and the FCA anticipates publishing a Policy Statement and final rules in early 2017
  • The PSR has until 23 December to respond to a super-complaint from consumer rights group Which? regarding consumer protection issues that arise when consumers are tricked into transferring money to fraudsters via “push” payments
  • FCA rules and guidance on the deadline for bringing new PPI complaints, the consumer communications campaign fee and guidance following on from the Supreme Court judgment in Plevin are due to be made by the end of December 2016
  • A fourth consultation paper on MiFID II implementation is anticipated in late 2016, with policy statements on the first three consultation papers to follow in early 2017
  • The FCA has published a discussion paper about how those who head up the legal function in firms should be treated under the Senior Managers and Certification Regime and whether they should continue to be part of regime. The consultation closes on 9 January 2017. The FCA intends to analyse the responses and provide clarification as to what is required. If further policy proposals are necessary it will issue a consultation paper

Judgments expected soon

  • Supreme Court - AIG Europe Limited v Woodman & Others – how should the words “in a series of related matters or transactions” within the aggregation clause of a professional indemnity policy be construed?
  • Court of Appeal - Credit Suisse Asset Management LLC v Titan Europe 2006 – 1 PLC & Others – what principal and interest payments are “Class X” Noteholders entitled to in legacy Commercial Mortgage Backed Securities transactions?
  • Supreme Court - FCA v Macris – what amounts to “identification” for the purposes of s. 393 of FSMA 2000? Should the FCA have given Mr Macris third party rights to make representations on matters set out in a final notice even though the notice did not refer to him by name?
  • Financial List (Chancery) - Property Alliance Group Ltd v RBS – swaps mis-selling and LIBOR manipulation case – trial finished in October.