On 1 October 2015, the Financial List was introduced. The Financial List is a new specialist list, operating in the Chancery Division and Commercial Court. The Financial List is intended to provide a single specialist list for complex and high-value financial litigation. Twelve judges have been initially assigned to the Financial List, six each from the Chancery Division and the Commercial Court.
Which claims can be heard in the Financial List?
There are three categories of cases that can be heard in the Financial List. These are:
- Claims of £50 million or more related to financial markets;
- Claims that require particular expertise in financial markets; and
- Claims that raise issues of general importance in financial markets.
Financial markets are broadly defined and there is a general power for courts to transfer cases to the Financial List if they fall within the spirit of these criteria.
What are the advantages (and potential disadvantages) of bringing a claim in the Financial List?
The main advantage of the Financial List is that the judges involved will have greater expertise in financial markets and related litigation than those on the Commercial Court List. However the potential downside to this approach is the possibility of delays in hearing a matter if there is not a List judge available. Whether this becomes a significant problem will depend on the number of cases brought in the Financial List and how many judges are added to it.
Alternatively, there is a risk that if there are an insufficient volume of cases on the Financial List, the judges will not have enough opportunities to develop these specialisms. The first case ( Banco Santander Totta v. Companhia Carris De Ferro de Lisboa SA & Others ) was transferred to the Financial List in December 2015. Anecdotally we understand that use of the Financial List has been relatively limited to date.
Market test case pilot scheme
A procedure is being trialled in the Financial List that will allow issues related to financial markets that require English law guidance to be settled without the need for a cause of action between the parties. The pilot will run for two years.
The court has the power to grant declaratory relief if it is in the public interest. The parties must have competing interests and both arguments must be properly represented to the court. It will be possible for affected third parties and professional or regulatory associations to intervene in appropriate cases and the default position is that no costs order will be made.
Why has the Financial List been introduced?
When introducing the Financial List, the Lord Chief Justice cited the need for financial markets to function in the most efficient way possible, and the importance of effective dispute resolution in achieving this. Given the importance of both the financial and legal markets to the UK, there is a strong incentive for the English courts to remain a preferred destination for international financial litigation and to retain an influential voice internationally. The Financial List is the most recent attempt to ensure this prominence continues.