A five minute roundup of upcoming cases and anticipated regulatory developments of interest to the Financial Services sector

On the Financial Services Horizon

Welcome to the fifth edition of our On the Financial Services Horizon newsletter – a regular update on upcoming cases and anticipated regulatory developments affecting the Financial Services sector.

Autumn 2017

Cases to watch

  • Dana Gas PJSC v Dana Gas Sukuk – at the end of September the Financial List will hear a claim which will consider whether a lack of Shari ‘a compliance invalidates the legal enforceability of payment obligations under the Dana Gas Sukuk. The case could have major ramifications for the Islamic finance industry and the sukuk market in the Middle East
  • Golden Belt v BNP Paribas & Ors (Golden Belt litigation) – deal trustee Golden Belt 1 Sukuk Company is suing BNP Paribas for negligence and breach of contract over claims that a $650m Islamic finance transaction was rendered worthless because the bank failed to get a proper signature from Maan al-Sanea (the Saudi billionaire businessman behind the deal). The case is listed for trial in the Commercial Court for six weeks starting in October
  • FCA v Capital Alternatives Limited and Others – the FCA is pursuing a claim for monies to be returned to investors in the African Land and Capital Carbon Credits schemes. The High Court has already ruled that these collective investment schemes could not be lawfully operated by the defendants. The court has yet to decide whether the defendants made false and misleading statements about these schemes and the extent of their liability. The trial started in July but overran and is now expected to finish in October

Regulatory developments

  • The FCA is consulting on new rules for current account providers to publish information on their websites on service and performance. This will include publishing information on the number and type of major operational or security incidents. The consultation is open until 25 September
  • Part 3 of the Criminal Finances Act, which introduces the corporate offence of failure to prevent facilitation of tax evasion, is in force from 30 September
  • The Pre-action Protocol for Debt Claims comes into force on 1 October. Click here for more
  • The FCA is consulting on new rules for assessing creditworthiness in consumer credit. The proposed new rules introduce a new definition of "affordability risk" which sets out factors firms should consider when assessing whether credit is affordable for borrowers. The consultation closes on 31 October
  • The government plans to introduce a Data Protection Bill once Parliament returns after the summer recess. Whilst the General Data Protection Regulation will be directly applicable across the EU from 25 May 2018 the Data Protection Bill is expected to deal with UK derogations and provide for continuity of standards post Brexit

Winter 2017

Cases to watch

  • Thornbridge Ltd v Barclays Bank plc – swaps mis-selling case in which the claimant hopes to appeal a first instance decision which saw all its claims for negligence, breach of contract and breach of statutory duty dismissed. The High Court gave the claimant permission to appeal but on 7 December the Court of Appeal will decide whether the appeal should be allowed to go ahead or whether the permission should be set aside
  • Singularis Holdings Ltd (in official liquidation) v Daiwa Capital Markets Europe Ltd – an appeal from a decision that a stockbroker was in breach of a Quincecare duty owed to its customer, Singularis (S), when it made payments to third parties from a client account held for the benefit of S. The instructions came from the then owner and sole director of S. A Quincecare duty arises where a bank (or as here, a stockbroker) makes a payment in circumstances where it had reasonable grounds for believing that the instruction to make the payment was an attempt to misappropriate its customer’s funds. The Court of Appeal is due to hear the appeal on 18 or 19 December
  • The Queen on the application of Holmcroft Properties Limited v KPMG & Ors – an appeal from an Administrative Court ruling which decided that where an independent reviewer had been appointed under a scheme to provide redress to customers who had been mis-sold financial products by a bank, the reviewer’s approval of the bank’s offer of compensation to a customer was not amenable to judicial review. The appeal is due to be heard by the Court of Appeal on 19 December

Regulatory developments

  • The Payment Systems Regulator anticipates publishing its report into the role of payment systems operators in preventing and responding to authorised push payments scams in Q3/4
  • The SEPA Instant Credit Transfer Scheme (a pan-European euro instant payment scheme) becomes effective on 21 November. The scheme will enable the transfer of up to 15,000 euro per single transaction in less than ten seconds, any time and any day, in an international area that will progressively span over 34 European countries
  • The EBA guidelines on regulatory disclosure requirements enter into force on 31 December. The guidelines aim to help banks comply with both the Capital Requirements Regulation and Pillar 3 and apply to globally and other systemically important institutions

Judgments expected soon

  • The Queen on the application of We Fight any Claim v FCA – claims management company “We Fight Any Claim” lost its recent bid for permission to bring a judicial review of the FCA’s decision to impose a deadline for bringing PPI complaints. It is now waiting for the Court of Appeal to decide whether it should have permission to appeal that decision
  • UBS AG (London Branch) and Anr v Kommunale Wasserwerke Leipzig GMBH and Ors – the bank is appealing a decision that it was not entitled to approximately $600m under a number of collateralised debt obligations which it had entered into with the defendant in 2006/7 and on which the defendant had defaulted in 2008. The bank was held liable under the law of agency for a bribe paid to the defendant by an intermediary despite the bank’s assertion that it knew nothing about the bribe. The appeal was heard by the Court of Appeal in May
  • Taurus Petroleum Ltd v State Oil Company of the Ministry of Oil, Republic of Iraq – the Supreme Court will consider the jurisdiction to make a third party debt order/receivership order in respect of sums payable under letters of credit and where a debt under a letter of credit is situated. It will also decide who the beneficiary was under the letters of credit on the facts of the case. Heard by Supreme Court on 21 and 22 March
  • Abdullah v Credit Suisse – mis-selling of structured products which were not suitable for the claimant’s investment objectives. Trial took place in the Commercial Court towards the end of March

If you are interested in any of the cases/topics highlighted in this publication, please let your usual DLA Piper contact know so that they can keep you informed about developments.