Following a joint consultation by the Commercial Court and the Chancery Division in April this year proposing new procedural rules to establish a new specialist court list to handle court claims relating to financial markets – known as the Financial List (FL) - the final rules have been published and came into force on 1 October 2015.  They comprise new civil procedure rules (CPR Part 63A), practice directions (PD51M and PD63AA), court forms, and a new court guide.  

How the FL will work, what it aims to do and what types of claim it will cover

The FL is situated in the Rolls Building, London, and will operate as a joint initiative between the Commercial Court and the Chancery Division.  Claims in the FL may be commenced in Chancery or the Commercial Court, but the FL will operate as a single list.  The Judge in charge of the Commercial Court and the Chancellor of the High Court will have joint overall responsibility for the FL.  The FL's main aim is to ensure that cases which would benefit from being heard by judges with particular expertise in financial markets, or which raise issues of general importance to financial markets, are dealt with by judges with suitable knowledge and experience.

The FL is available to any claim which:

principally relates to loans, project finance, banking transactions, derivatives and complex financial products, financial benchmark, capital or currency controls, bank guarantees, bonds, debt securities, private equity deals, hedge fund disputes, sovereign debt, or clearing and settlement - and is for more than £50 million or equivalent;

  1. requires particular expertise in the financial markets; or
  2. raises issues of general importance to the financial markets. "Financial markets" for these purposes include fixed income markets (repos, bonds, credit derivatives, debt securities, and commercial paper generally), and the equity, derivatives, loan, foreign currency and commodities markets. 

The FL Court Guide states that even where (i) above is met, the FL is not suitable for straightforward claims which require no financial market expertise.  The Guide also explains that insurance, re-insurance or professional negligence claims, or a case falling within the normal specialist jurisdiction of the Companies Court (insolvencies, capital reductions, schemes of arrangement, as well as shareholder disputes, like unfair prejudice petitions and equitable petitions) will not generally constitute FL claims, but could still be eligible under (ii) or (iii) above.  Note that (ii) and (iii) are not subject to a financial threshold.

Cases may be transferred into and out of the FL at the request of the parties or on the court's initiative.  Applications must be made to an FL judge.  When transferring into the FL, the applicant must demonstrate the case's eligibility in accordance with the above criteria. 

The applicable court procedure and the presiding judge

The new FL-specific CPR rules, practice directions, court forms and court guide will apply to claims in the FL, irrespective of whether the case was issued in the Chancery Division or the Commercial Court.  For any matter not covered by these, the Commercial Court Guide will apply - and any outstanding matters are covered by the Chancery Guide. 

FL judges will be judges from the Commercial Court and the Chancery Division who have been authorised to hear and determine FL claims.  The Judge in charge of the Commercial Court and the Lord Chancellor, responsible for the functioning of the courts, will assign judges to cases, but parties can express their views on whether a case is more appropriately allocated to a Commercial Court or a Chancery FL judge.  The assigned FL judge will deal with all case management decisions and hearings through to trial and, if necessary, enforcement.  Market development seminars will be provided to them by the Judicial College to ensure they are on top of the latest developments.

The new financial markets test case scheme

This is a new test case scheme which, the FL Court Guide explains, is "to facilitate the resolution of financial market issues in relation to which immediately relevant authoritative English law guidance is needed".  It will enable issues to be brought before the court by interested parties "who are actively in business in the relevant markets" without the need for a cause of action between them.  In essence, the scheme operates by following the procedure applicable to FL claims, save that the claim form must clearly indicate that the claim is being brought pursuant to the scheme.  Further, such claims must be brought by mutual agreement between the parties and they must seek to agree the facts – so given that it is a consensual process, it is unlikely that proceedings will be strung out with interim applications and tactical procedural moves.  The FL Court Guide states that "the pilot provides a mechanism for the court to grant declaratory relief in a 'friendly action' because it is in the public interest to do so in accordance with the guidance provided in Rolls-Royce plc v Unite the Union [2009] EWCA Civ 387".

In appropriate cases a relevant trade body or association may join as a party, or otherwise be represented, and the general rule will be that there will be no order as to costs.  In cases of particular importance or urgency, the trial may be heard by two FL judges or an FL judge and a Lord or Lady Justice of Appeal.  The scheme will run for two years from 1 October 2015.


Essentially the FL is a thoughtful and welcome reorganisation of the excellent resources already available in the Commercial Court and the Chancery Division, which pools and aligns financial-specific judicial expertise to appropriate cases.  This is a welcome, positive move.  Having a single judge, with the appropriate background, experience and understanding of complex financial structures, products and markets, dealing with a case from start to finish, is a simple yet effective idea, which will hopefully save time and costs in the long run, provide a smoother process and result in a fairer resolution of disputes.  The FL Court Guide itself says that having specialist FL judges will "provide fast, efficient and high quality dispute resolution".  Disputes in this area can result in decisions which are significant for the domestic economy and the wider markets.

The innovative market test scheme is something which will need to be seen in action in order to assess its effectiveness.  Lord Thomas expressed the hope that the scheme "will help avoid costly and time-consuming litigation through providing a mechanism for authoritative guidance before disputes have arisen".  Theoretically, one can see that the procedure provides an opportunity to resolve areas of uncertainty and ambiguity (for example, "shaky" clauses in market standard documentation, such as ISDA or LMA master agreements) on issues of interest and relevance to the wider financial markets without waiting for a fact-specific claim to arise.  But query whether parties will really opt to try to resolve such issues in the abstract in practice – and who, if anyone, will want to "go first".  Time will tell.

Lord Thomas also referred to the FL as "a beacon", attracting litigants from all over the world to the English courts.  This will obviously depend on whether jurisdiction clauses allow parties to bring claims in England in the first place (or, in the absence of an express provision, on the relevant conflict of laws rules).  Having said that, many international financial transactions already contain English jurisdiction clauses: the impartiality of our judiciary, the lack of trial by jury, the absence of punitive and exemplary damages, the costs system and the relative speed of our court process, already make English courts a popular choice.  The availability of the FL may act as a further incentive to encourage more parties to choose English law and jurisdiction in future. 

The Rolls Building is already recognised as the world's largest dedicated business court – housing the Commercial Court, the Chancery Division and the Technology and Construction Court.  The introduction of a dedicated FL should further cement London's place on the international dispute resolution stage in relation to financial services litigation.