A new specialist list in the Commercial Court and Chancery Division has been set up to deal with complex and high-value financial disputes.
The Financial List, which is managed by designated judges from the two existing courts, can be used for any claim that principally relates to banking transactions and financial products, such as derivatives, bank guarantees, bonds, hedge funds, debt securities and private equity deals, provided that the claim is worth more than £50m.
The list can also be used for any claim which requires particular expertise in the financial markets, or any claim that raises issues of general importance to the financial markets. No limit in value applies to claims in these two categories.
A claim can be issued in either the Commercial Court or the Chancery Division, using one of the new designated claim forms, and will follow the same procedure in each case. Once issued, the claim will be allocated a specialist Financial List judge, who will manage the case from beginning to end. Urgent applications and vacation business can be heard by another Chancery or Commercial Court judge if no Financial List judge is available, and the court can order that enforcement be dealt with by Masters or District Judges.
The rules governing the operation of the Financial List are set out in new amendments to the Civil Procedure Rules: Part 63A and Practice Direction 63AA. There is also a new Financial List Guide, which broadly follows the procedure adopted in the Commercial Court.
The Financial Markets Test Case Scheme
Also coming into effect today is a pilot scheme which, unusually, gives the court jurisdiction to determine hypothetical disputes before a claim actually arises.
The new Practice Direction 51M establishes a two year pilot scheme for financial market test cases within the Financial List. A claim will qualify as a test case provided that it raises issues of general importance to the financial markets in relation to which “immediately relevant authoritative English law guidance” is needed.
Provided that such guidance is needed, a test case can be brought even before a cause of action exists between the parties. However, the parties are required to seek to agree the facts upon which the court will be asked to give its ruling.
Test cases can only be brought with the mutual agreement of the parties, who must have opposing interests as to the interpretation of the law. The court can give permission to allow trade or regulatory bodies to be joined to the proceedings, and the claim may be heard by a Financial List judge sitting alone, or sitting with either another Financial List judge or a Lord or Lady Justice of Appeal. The general rule for test cases is that there will be no order for costs.