Banking Disputes Quarterly

Q1 2017

Banking Disputes Quarterly

Litigation Update

By:

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

  • Members of the Shari'ah Board - religious scholars or lawyers?
    12 APR 2017

    Golden Belt v BNP Paribas (Golden Belt) is perhaps the most high profile English case on Islamic Finance for more than a decade. In it the High Court will be asked to determine an issue which has potentially enormous ramifications for Islamic Banking. Arguably it is not since Beximco Pharmaceutical Ltd and others v Shamil Bank of Bahrain [2004], when the Court of Appeal held that it was not permissible for general principles of Shari'ah law to be incorporated into a contract in addition to English law. Golden Belt will be of particular importance to Shari'ah Boards on the issue as to whether their pronouncements could amount not only to expressions of religious but also legal opinion. If the High Court determines that pronouncements of the Shari'ah Board can amount to enforceable legal opinions, this is likely to have a significant impact on the nature of the pronouncements that Shari'ah Boards may be willing to make.

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  • PPI Complaints – FCA publishes final rules and guidance
    12 APR 2017

    Payment Protection Insurance (PPI) mis-selling has been a huge issue for firms. Not only has it damaged public trust and confidence but it has also been an enormous drain on resources with firms handling over 18.4 million PPI complaints and paying out over £26 billion in redress since 2011. Firms will therefore welcome the news that the Financial Conduct Authority (FCA) has finally completed its lengthy consultation on the future conduct of such claims and has published final rules and guidance; the rules and guidance should help firms bring the PPI issue to an orderly conclusion.

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  • Commercial Court confirms that asymmetric jurisdiction clauses may be exclusive for the purposes of EU law
    12 APR 2017

    Asymmetric jurisdiction clauses - also known as one-sided or 'for the benefit' clauses - are common in international financial services agreements, but their validity under EU law has been questioned in recent years by the French Supreme Court. The English High Court has now confirmed their validity and, in particular, that they are capable of benefiting from the protection given to all exclusive clauses by new provisions in the Brussels Regulation Recast EU 1215/2015 (Brussels Recast). This decision is reassuring for banks and other financial institutions, although courts in other EU Member States may side with the French rather than English courts on the issue, and the Court of Justice of the European Union (CJEU) has yet to consider it.

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  • Is there a need for expert evidence in IRHP mis-selling disputes?
    12 APR 2017

    Sometimes cases can be decided purely on the basis of the factual evidence. At other times expert evidence may be needed to assist with specialist or technical areas but such evidence can only be brought with the court’s permission. Claimants in interest rate hedging product (IRHP) mis-selling disputes often seek permission to adduce expert evidence on issues such as the suitability of a given interest rate product or the adequacy of the information provided about it. Defendant banks routinely oppose such applications but claimants are often granted permission. In a recent case permission was refused on the basis that there was no acknowledged body of expertise in the field and expert evidence was not reasonably required to resolve the issues.

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  • Singularis: a warning to all institutions handling client monies
    12 APR 2017

    The recent case of Singularis Holdings Ltd v Daiwa Capital Markets Europe Ltd [2017] EWHC 257 (Ch) (Singularis) is an important decision affecting any institution that handles client payments, including banks. It decided that a stock broker was liable in negligence for having breached its duty of care to its customer, by paying monies out of its client account on the instruction of a director and its only shareholder. We highlight what institution should do to ensure they don't fall victim to the same type of fraud.

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  • Policing and crime act 2017: how sharp will OFSI's teeth prove to be?
    12 APR 2017

    The Policing and Crime Act 2017 (PCA) received Royal Assent on 31 January 2017. Buried within Part 8 are a number of provisions which make significant changes to the financial sanctions regulatory landscape. Most likely to be of concern to financial institutions is the prospect of fines of £1 million or more being imposed outside the usual judicial process by the Office of Financial Sanctions Implementation (OFSI). The key provisions came into force from 1 April 2017; in this article we focus on some of the key issues likely to have significant impact.

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  • Spotlight on: Our banking litigation practice in Scotland
    12 APR 2017

    DLA's highly experienced Scottish banking litigation team, based in Edinburgh, acts for a broad range of clients in the finance sector, including major international banks, building societies, challenger banks, investors and card payment providers. Find out what services our team provides to local and international clients.

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