With many members and users of the financial markets choosing English law to govern their relationships, and recognising the UK as a global financial hub, a new court to deal with disputes between them is to be set up in London. The launch of the “Financial List” on 1 October 2015 is primarily intended to meet the needs of the international financial community, to ensure that cases are heard by judges with particular relevant expertise and to provide fast, efficient, and high quality dispute resolution of claims related to the financial markets.
What types of claims will the new court deal with?
- Claims related to loans, project finance, banking transactions, derivatives, 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 settlements worth more than £50 million; or, irrespective of their value
- requiring particular expertise in the financial markets; or
- raising issues of general importance to the financial markets.
“Financial markets” for these purposes is widely defined, to include: “fixed income markets (repos, bonds, CDS, debt securities and commercial paper), equity markets, derivatives, FX and commodities.”
The real innovation of the Financial List is its pilot Test Case Scheme. This will allow proceedings to be commenced in a market case where “immediately relevant authoritative” guidance is required on a point of English law, but there is no actual dispute between the parties. The parties are only required to “be actively in business in the relevant market” and possessing opposing interests. In appropriate cases, a relevant trade body or association may be joined to ensure that the arguments of all interested parties are properly put before the court. In such cases, the parties must seek to agree the facts and costs will not generally be awarded.
Who will deal with the claims?
Ten dedicated judges with particular expertise in these types of cases. The judicial team will receive regular focussed training on market events and developments by the Financial Markets Law Committee.
A single judge will be allocated to an individual case for all purposes, including case management and pre-trial applications, trial itself, and (unusually) enforcement.
Parties may have some ability to influence the choice of judge by making written representations to the Chancellor and Judge in charge of the Commercial Court List (who will jointly decide which judge will deal with which case), either by identifying the relevant issues which will need to be decided (of which an individual judge may have particular expertise) or any other matters considered relevant to judge allocation.
What rules will apply?
Although Financial List claims can be brought in the Commercial Court or Chancery Division, the rules and guidance of the Commercial Court will apply by default.