Welcome to the sixth edition of our On the Financial Services Horizon newsletter – a regular update on upcoming cases, news and anticipated regulatory developments affecting the Financial Services sector.

Q4 2017

Cases to watch

  • Parmar v Barclays Bank plc - interest rate hedging products swaps mis-selling claim. This is the first breach of statutory duty claim brought by "private persons" under s.138D of the Financial Services and Markets Act 2000 to reach trial. It is currently being heard in the Chancery Division by Judge Andrew Hochhauser QC
  • Thornbridge Ltd v Barclays Bank plc – swaps mis-selling case in which the claimant hopes to appeal a first instance decision which saw all its claims for negligence, breach of contract and breach of statutory duty dismissed. The High Court gave the claimant permission to appeal but on 7 December the Court of Appeal will decide whether the appeal should be allowed to go ahead or the permission be set aside
  • Singularis Holdings Ltd (in official liquidation) v Daiwa Capital Markets Europe Ltd – an appeal from a decision that a stockbroker was in breach of a Quincecare duty owed to its customer, Singularis (S), when it made payments to third parties from a client account held for the benefit of S. The instructions came from the then owner and sole director of S. A Quincecare duty arises where a bank (or as here, a stockbroker) makes a payment in circumstances where it had reasonable grounds for believing that the instruction to make the payment was an attempt to misappropriate its customer's funds. The Court of Appeal is due to start hearing the appeal on 18 or 19 December
  • The Queen on the application of Holmcroft Properties Limited v KPMG & Ors – an appeal from an Administrative Court ruling which decided that where an independent reviewer had been appointed under a scheme to provide redress to customers who had been mis-sold financial products by a bank, the reviewer's approval of the bank's offer of compensation to a customer was not amenable to judicial review. The appeal is due to be heard by the Court of Appeal on 19 December

Regulatory and other developments

  • The Data Protection Bill is currently being debated in Parliament. Consumer organisation Which? is calling for amendments to the Bill so as to allow independent organisations acting in the public interest to help groups of affected consumers obtain collective redress for data breaches
  • A Working Group chaired by Lady Justice Gloster is consulting on radical proposals to change the disclosure system in English civil proceedings so that there will be no automatic entitlement to "search" based disclosure. Under the proposals, "Extended Disclosure", which may take the form of one or more of five different Disclosure Models for different issues, will only be ordered where there has been full engagement between the parties. Views are sought by 28 February 2018 with the aim of introducing a two year pilot in the Business and Property Courts later in 2018
  • The PSR is consulting on proposals to introduce a "contingent reimbursement model" for victims of authorised push payment (APP) scams. This will be a voluntary scheme under which consumer and small business victims of APP scams may be eligible for a refund depending on whether the payment service providers caught up in the scam and the customer have complied with various as-yet undefined rules of the scheme. The consultation closes on 12 January 2018
  • The SEPA Instant Credit Transfer Scheme (a pan-European euro instant payment scheme) becomes effective on 21 November. The scheme will enable the transfer of up to 15,000 euro per single transaction in less than ten seconds, any time and any day, in an international area that will progressively span over 34 European countries
  • The EBA guidelines on regulatory disclosure requirements enter into force on 31 December. The guidelines aim to help banks comply with both the Capital Requirements Regulation and Pillar 3 and apply to globally and other systemically important institutions
  • The FCA is expected to publish a policy statement and final rules on how to help customers in persistent credit card debt

Q1 2018

Cases to watch

  • Law Debenture Trust Corp PLC v Ukraine - an appeal against a Commercial Court decision granting the Russian Federation summary judgment against Ukraine for the non-payment of $3 billion which Ukraine had borrowed under Eurobonds. Ukraine alleged that the money was borrowed as a result of unlawful and illegitimate economic, political and military pressure, designed to deter it from achieving its policy objective of drawing closer to the European Union. The Commercial Court decided that the claim was for repayment of debt instruments and there was no justiciable defence. The appeal is scheduled to be heard by Court of Appeal on 22 January 2018
  • Property Alliance Group v The Royal Bank of Scotland - an appeal against the decision of Mrs Justice Asplin dismissing various interest rate derivative products mis-selling claims against RBS which involved LIBOR allegations. The appeal starts on 29 January 2018
  • Khrapunov v JSC BTA Bank - can serial contempts of court in relation to the breach of freezing orders amount to "unlawful means" for the purposes of the tort of conspiracy to injure by unlawful means? Should the English court have jurisdiction over the claim under Article 5 (3) of the Lugano Convention as England was "the place of the event giving rise to the damage in question" as this was where an agreement between the conspirators was allegedly made? The Supreme Court is likely to hear an appeal on these issues towards the end of January 2018
  • Commerzbank Aktiengesellschaft v Pauline Shipping and Liquimar Tankers - can asymmetric jurisdiction clauses be exclusive for the purposes of EU law and be capable of benefiting from the protection given to all exclusive clauses by the new provisions in the Brussels Regulation Recast? Due to be heard in the Court of Appeal on 28 February or 1 March 2018

Regulatory and other developments

  • Firms must comply with the Packaged Retail Insurance-based Investment Products Regulation (PRIIP) from 1 January 2018
  • The majority of the provisions of the EU Benchmarks Regulation will apply across Europe from 1 January 2018
  • MiFID II Directive and MiFIR will apply from 3 January 2018
  • Member States are required to transpose PSD2 into national law and regulations by 13 January 2018
  • The FCA intends to publish an update on its review of the motor finance market in the first quarter of 2018

Judgements expected soon

  • Abdullah v Credit Suisse - mis-selling of structured products which were not suitable for the claimant’s investment objectives. Trial took place in the Commercial Court towards the end of March 2017
  • National Bank of Abu Dhabi PJSC v BP Oil International Limited - appeal over whether a company, which had purported to assign to a bank a receivable represented by an agreement with a third party, should be held liable for breach of warranty and false representation where it transpired that the third-party agreement contained a prohibition on assignment. Heard by the Court of Appeal on 27 July 2017
  • Sukuk Trust Certificate Holders v BNP Paribas and Ors – hedge funds led by Fortress Investment Group have sued BNP Paribas over its role in arranging a $650m Islamic bond. They allege that the bank was negligent in failing to get a wet ink signature from Maan al-Sanea (the Saudi billionaire businessman behind the deal) on a promissory note, the effect of which was to render the note unenforceable under Islamic law. The five week trial concluded recently
  • FCA v Capital Alternatives Limited and Others - the case concerns the promotion and operation of collective investment schemes without authorisation and misleading statements being made to investors. The trial finished on 5 October and judgment is expected early in 2018