The recent decision in Property Alliance Group Limited v Royal Bank of Scotland plc  EWHC 207 (Ch)provides helpful early guidance as to the Court’s approach to contested applications to transfer proceedings to the newly created Financial List. While each case will depend on its own facts, the following factors are likely to be key:
- Whether the claim involves issues of general importance to the financial markets, or the need for particular expertise on the part of the judge;
- Whether the claim is a test or lead case;
- Whether a Financial List judge is available to conduct both the pre-trial review (“PTR”) and the trial; and
- Whether the transfer will otherwise affect the trial timetable.
The party applying to transfer should also consider what assurances can be given to the Court. For example, in the instant case, the applicant addressed the final factor above by giving assurances that it did not intend to apply to adjourn or make procedural applications which might disrupt the commencement of trial.
An application to transfer proceedings to the Financial List should be made at the earliest opportunity. While the application to transfer the proceedings was successful in this case (in part because it could be done without impact on the trial timetable), the Court noted that it would have been preferable for the application to have been made earlier, and warned of the potential consequences of delay in other cases.
See below for a more detailed explanation of the guidance given by the Court.
The background to the decision need only be mentioned briefly. Property Alliance Group Limited (“PAG”) has brought claims against the Royal Bank of Scotland (“RBS”) broadly relating to (a) the alleged mis-selling by RBS of certain interest rate swaps; (b) the transfer of management of PAG’s banking affairs to a Global Restructuring Group within RBS and conduct of that group in relation to PAG’s business; and (c) allegedly improper conduct by RBS in relation to the fixing of LIBOR rates.
RBS applied for an order transferring the proceedings to the Financial List, which PAG opposed.
2. The Financial List
The Financial List was established in the High Court from 1 October 2015 as a specialist cross-jurisdictional list to deal with claims relating to financial markets. Pursuant to CPR Part 63A “Financial List Claims” may be brought in the Financial List. Financial List Claims are claims:
- for more than £50 million principally relating to certain financial markets matters (e.g. loans, derivatives, bonds etc.) (“Category A”);
- which require particular expertise in financial markets (“Category B”); or
- which raise issues of general importance in financial markets (“Category C”).
Cases in the Financial List are heard by specialist judges drawn from both the Chancery Division and the Commercial Court with particular expertise in, and who receive regular updates on, financial markets.
The Court granted RBS’s application to transfer the proceedings to the Financial List.
Although the value of the claim was less than £50 million, the Court found that there was no doubt that the proceedings involved a Financial List Claim for the purposes of CPR Part 63A, since there was broad acceptance that the case fell within Category C.
However, that is not of itself sufficient for an application to transfer the claim to the Financial List. Helpfully, the judgment set out ten matters of “particular significance” in deciding whether an application should be granted. These factors can be separated into three principal categories:
Market significance factors
- the extent to which the case concerns matters of financial market significance (as opposed to matters specific only to the proceedings in question);
- the relative importance of the issues of financial market significance;
Procedural factors: backward-looking
- whether the case has already been assigned to a judge;
- whether (if the transfer is granted) a change of judge would be required;
- the length of time for which the proceedings have been on foot;
- the extent to which the assigned judge is familiar with the proceedings, and has conducted hearings and delivered judgments;
- the extent to which the familiarity of the assigned judge would permit the proceeding (including pre-reading and the trial itself) to be conducted in a more efficient and timely way than if a new judge were assigned;
Procedural factors: forward-looking
- the proximity to the trial date (if one has been fixed);
- whether the trial timetable would be disrupted by the transfer into the Financial List; and
- whether assigning a new Financial List judge would be disruptive to one or more other cases in the other lists (e.g. because that judge would no longer be able to hear those proceedings).
The Court made a number of key findings and observations, considering the above factors.
Category C proceedings were more likely to be transferred to the Financial List than if the proceedings fell under Category A. In this context, the Court noted that the proceedings had been managed “conscientiously and to a high standard since their inception” by Mr Justice Birss but that a transfer of the case to the Financial List would involve a change of judge because Birss J was not a Financial List judge. The Court noted that the Financial List was made up of a small number of judges expert in financial markets, who were across important developments in those markets. The Court therefore drew a distinction between Category A cases on the one hand, and Category B or C cases on the other. While it would not always be necessary or appropriate to transfer Category A cases to the Financial List (as all judges of the Commercial Court and the Chancery Division were equipped to deal with general financial and business disputes), those in categories B and C were different.
The Court found that the allegations concerning alleged mis-selling of interest rate swaps and fixing of LIBOR rates were of general market significance and relevant to other market participants and their clients. Similarly, if the case were to be treated as a “test” or “lead” case, particularly in relation to the LIBOR allegations, it would be desirable to have the case heard by a specialist Financial List judge so that it may carry “appropriate weight and respect in the financial markets”.
Another “important consideration” was that it would be possible to make a Financial List judge available to hear the proceedings, despite the proximity to the PTR and commencement of the trial without any disruption to the trial timetable. The Court was comforted by assurances from RBS that it did not presently intend to apply to adjourn the trial because of doubts about the adequacy of the trial estimate, or any application concerning procedural matters which might disrupt the commencement of the trial.
Finally, the Court observed that it was highly desirable - in large and complex disputes - for the same judge to conduct both the PTR and the trial. This was not an issue in the current case, as the transfer could be made without disrupting the trial timetable.
In many cases, whether proceedings are suitable for transfer to the Financial List will not be a contentious issue between the parties. However, where an application for the transfer is contested, the instant decision provides helpful practical guidance. In addition to the significant factors outlined by the Court, it is suggested that parties applying to transfer to the Financial List should consider what assurances can be given to address any problematic factors and should make the application as soon as practically possible.