Banking Disputes Quarterly

Q2 2016

Banking Disputes Quarterly

Litigation Update

Welcome to the latest edition of our Banking Disputes Quarterly, designed to keep you up to date with the latest news and legal developments and to inform you about future developments that may affect your practice. The paragraphs below summarise the issues covered in this edition.

In this issue

  • Claims management companies to face tougher regulatory regime
    12 JUL 2016

    The Government is to clamp down on the poor practices of Claims Management Companies (CMCs) by introducing a more robust regulatory regime. Under the new regime, regulatory responsibility for CMCs will pass from the current Claims Management Regulator (CMR) to the Financial Conduct Authority (FCA). All regulated CMCs wishing to carry on trading will need to be re-authorised and CMC managers will become personally accountable for rule breaches for which they are responsible. Perhaps more importantly, CMCs operating in the financial claims sector can also expect to see caps imposed on their fees, which may act as a commercial disincentive to continue with the more dubious practices reported.

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  • Third Party (Rights Against Insurers) Act 2010 – benefits for lender claims
    12 JUL 2016

    Lenders contemplating potential claims against insurers of insolvent professionals will welcome the fact that the Third Parties (Rights Against Insurers) Act 2010 (2010 Act) is to finally come into force from 1 August 2016, having been updated by the Third Parties (Rights Against Insurers) Regulations 2016.

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  • Mis-selling – no duty to advise on onerous terms – Finch v Lloyds TSB Bank Plc
    12 JUL 2016

    Following a long line of recent successes for banks in mis-selling cases, there has now been another significant success, this time for Lloyds Bank (Bank), in a fixed rate loan dispute relating to the issue of break costs. The decision in Finch v Lloyds TSB Bank Plc [2016] EWHC 1236 (QB) (Finch) is significant for a number of reasons but perhaps most importantly for the court’s observation that there is no general duty in tort for a bank to advise a customer and that there would need to be "exceptional circumstances" before a court would conclude that a bank came under a duty to advise. In mis-selling cases where borrowers regularly assert that an advisory duty was assumed by their bank, this represents another significant obstacle that they will need to overcome.

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  • Financial sanctions and de-risking: lessons from recent developments in Iranian sanctions restrictions
    12 JUL 2016

    Recent developments and relaxation of EU sanctions against Iran have opened up significant business opportunities for manufacturers and exporters. Whilst in principle it should now be easier to trade with Iran, this is proving challenging in practice given the understandably cautious approach taken by financial institutions. Whilst there are challenges arising from the disconnect between US and EU sanctions, there are potentially significant benefits to greater involvement in this area of business.

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