Banking and Financial Markets Litigation

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Banking and Financial Litigation Markets Update - Spring 2023

Published on 06 March 2023. By Carolin Ayres, Associate and Lucy Baughan, Associate and Jonathan Cary, Partner and Jessica Davies, Associate and Olivia Dhein, Knowledge Lawyer and Jake Hardy, Partner and Simon Hart, Partner and Charlotte Henschen (née Ducker), Partner and Tom Hibbert, Global Head of Commercial Disputes and Tim Potts, Senior Associate and Chris Ross, Partner and Emily Saffer, Associate and Poppy St John, Associate and Christopher Wheatley , Senior Associate and Alan Williams, Partner

This update is brought to you by RPC’s top tier banking and financial markets disputes practice in London, with specialists in all areas of financial markets litigation (and arbitration) and a wealth of expertise including frequent involvement in the most complex, high-value, and high-profile disputes in the sphere. Here, we take a look at some of the most important judgments in recent months.

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Court of Appeal finds that Bitcoin's developers may owe fiduciary duties to bitcoin owners

Published on 08 February 2023. By Dan Wyatt, Partner and Christopher Whitehouse, Senior Associate

In a highly anticipated judgment, the Court of Appeal has handed down its decision in Tulip Trading Limited v van der Laan and others [2023] EWCA Civ 83, allowing the claimant's appeal. The court found that the developers looking after Bitcoin arguably owed fiduciary duties in tort to an owner of bitcoin, and whether such a duty did arise in the specific proceedings would depend on the facts established at trial.

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No loss? No Quincecare claim … the Supreme Court judgment in Stanford International Bank v HSBC

Published on 12 January 2023. By Jonathan Cary, Partner and Olivia Dhein, Knowledge Lawyer

The Supreme Court has handed down its judgment in Stanford International Bank Ltd v HSBC Bank plc, deciding that there was no pecuniary loss suffered by the Claimant and therefore no basis for a Quincecare claim.

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Litigation risk arising from recent LDI related disruption in the UK gilt market

Published on 18 October 2022. By Simon Hart, Partner and Daniel Hemming, Partner and Charlotte Henschen (née Ducker), Partner and Tim Potts, Senior Associate

In this bulletin, we examine the role of Liability Driven Investment (LDI) in the widely publicised disruption experienced in the UK gilts market in recent weeks and consider the disputes which might result.

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Competing subordinated debts – the lessons learnt from Lehmans' insolvency

Published on 08 July 2022. By Suzan Kurdi, Of Counsel and Jake Hardy, Partner

Some 13 years ago, Lehman Brothers' sudden and unexpected insolvency sent ripples across the banking and financial services market, some of which are still felt today. The Court of Appeal's decision in the consolidated cases of Lehman Brothers Holdings Scottish LP 3 v Lehman Brothers Holdings plc (in administration) and others [2021] EWCA Civ 1523 was the latest in a long line of cases seeking to unwind the issues arising from Lehman Brothers' unexpected collapse.

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High Court decides that reviving proceedings automatically stayed under CPR 15.11 requires relief from sanctions

Published on 29 June 2022. By Daniel Hemming, Partner and Tim Potts, Senior Associate

In a recent judgment, the English Commercial Court in Bank of America Europe DAC v CITTA Metropolitana Di Milano has provided guidance on the "automatic stay" provisions of CPR 15.11 and the circumstances in which parties can revive dormant proceedings subject to such an automatic stay.

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APP fraud: Commercial Court considers approach to unjust enrichment and knowing receipt claims

Published on 15 June 2022. By Lucy Baughan, Associate and Jonathan Cary, Partner

The recent Commercial Court decision of Tecnimont Arabia Limited v National Westminster Bank PLC(1) considered the court's approach to a claim for unjust enrichment against a recipient bank in an authorised push payment (APP) fraud context. In particular, the Court examined whether the enrichment can be said to be at the 'expense' of the claimant, what factors amount to enrichment being 'unjust' and when the defence of 'change of position' is available. In relation to knowing receipt, the court considered the question of when property is 'trust property' for the purposes of the cause of action.

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Are you a "person discharging managerial responsibility"? High Court clarifies meaning of PDMRs under FSMA

Published on 23 May 2022. By Carolin Ayres, Associate and Jake Hardy, Partner

In a recent interim decision in Allianz Global Investors GmbH and Ors v G4S Ltd (formerly G4S plc) [2022] EWHC 1081 (Ch), Mr Justice Miles clarified the scope of the expression "persons discharging managerial responsibility" ("PDMRs") for the purpose of establishing liability under s.90A and Schedule 10A of Financial Services and Markets Act 2000 ("FSMA").

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Privy Council decides that banks owe no Quincecare duty to a beneficial owner of monies in an account

Published on 17 May 2022. By Tom Hibbert, Global Head of Commercial Disputes and Jonathan Cary, Partner and Alan Williams, Partner and Jake Hardy, Partner and Chris Ross, Partner and Olivia Dhein, Knowledge Lawyer

A bank does not owe the beneficial owner of account monies any duty of care in negligence, including any Quincecare duty: this was the conclusion of the Privy Council in the Isle of Man case Royal Bank of Scotland International Ltd v JP SPC4 and another. The appeal concerned a fraud where the account holder had defrauded the beneficial owner of the monies, an investment fund, by paying funds out of the relevant bank accounts in contravention of a legitimate investment scheme.

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Court of Appeal strikes out defences that funds' losses resulting from FX manipulation have been passed on to investors following redemption

Published on 06 May 2022. By Simon Hart, Partner and Christopher Wheatley , Senior Associate and Olivia Dhein, Knowledge Lawyer

In Allianz Global Investors GmbH & Ors v Barclays Bank PLC & Ors(1), the Court of Appeal allowed an appeal by the claimant funds (the Funds) and struck out defences by the Defendant banks (the Banks) that losses incurred by the Funds had been avoided or passed on upon redemption by their investors.

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Court of Appeal holds that Quincecare duty can arise in principle where customer gives instructions in authorised push payment fraud

Published on 21 April 2022. By Jonathan Cary, Partner and Olivia Dhein, Knowledge Lawyer

The Court of Appeal has clarified in Philipp v Barclays Bank UK Plc [2022] EWCA Civ 318 that the Quincecare duty, which requires a bank to refrain from acting on a payment instruction and to make inquiries when it is on notice of a serious possibility of fraud, can arise for a bank even where it is the customer themselves giving instructions to pay money out of their account to a fraudster.

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Court of Appeal draws distinction between claims for recovery of tax and restitution for tax paid out fraudulently

Published on 07 April 2022. By Alan Williams, Partner and Poppy St John, Associate

In Skatteforvaltningen v Solo Capital Partners,(1) the Court of Appeal investigated in detail the operation of rule 3(1) of Dicey, Morris & Collins on the Conflict of Laws (edition 15) (Dicey rule 3), which provides that English courts do not have jurisdiction over actions for "the enforcement, either directly or indirectly, of a penal, revenue, or other public law of a foreign State". The Court decided that the Danish tax authority's claim did not fall within Dicey rule 3 as it concerned the restitution of monies misappropriated by fraud rather than enforcement of tax.

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Where's the damage? High Court dismisses jurisdiction challenge in US$495 million claim

Published on 10 March 2022. By Jake Hardy, Partner and Charlotte Henschen (née Ducker), Partner

The High Court has dismissed UBS' challenge to jurisdiction in a ca. US$495 million claim – and in doing so set out useful guidance in terms of how the Court will determine "where the damage has occurred" in cases of economic loss. The judge looked for the most "natural analysis" in determining the manifestation of the loss, and broadly agreed that "the usual answer [in bad investment cases] will be that the loss occurs in, and at the place of, the bank account which was depleted."

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ESG claims in the banking and financial markets Sector: will "greenwashing" claims soon be common in the UK?

Published on 14 February 2022. By Chris Ross, Partner

Environmental, Social and Governance "ESG" funds are an attractive avenue for investors seeking responsible investment choices.

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No knowing receipt claim where equitable interest is destroyed: Byers v Saudi National Bank

Published on 03 February 2022. By Emily Saffer, Associate and Simon Hart, Partner

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The Court of Appeal has held that a claim in knowing receipt will fail if, at the moment of receipt, the beneficiary’s equitable proprietary interest is destroyed or overridden so that the recipient holds the property as beneficial owner.

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How aware were you? High Court refuses to strike out fraudulent misrepresentation claim in VW 'Dieselgate' emissions

Published on 03 February 2022. By Jessica Davies, Associate and Jake Hardy, Partner

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In Crossley and others v Volkswagen Aktiengesellschaft and others(1) the High Court refused to strike out or summarily dismiss the fraudulent misrepresentation claim brought by more than 86,000 vehicle owners against Volkswagen ("VW").

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High Court dismisses application for extension of limitation period on basis of fraud at summary judgment stage

Published on 20 January 2022. By Jake Hardy, Partner and Christopher Wheatley , Senior Associate

In Libyan Investment Authority v Credit Suisse International & Ors ([2021] EWHC 2684 (Comm), the Commercial Court granted summary judgment dismissing the Libyan Investment Authority's (LIA's) claims against Credit Suisse International (Credit Suisse) and others on the grounds that they were time-barred.

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Limitation Act 1980 s.32(1): whether a claimant could have discovered fraud with "reasonable diligence" extends to events prior to accrual of the cause of action

Published on 06 January 2022. By Carolin Ayres, Associate and Jonathan Cary, Partner

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The High Court found that, when considering the postponement of the limitation period for the purposes of Section 32(1) of the Limitation Act 1980, the question of whether the claimant could have discovered the fraud with "reasonable diligence" extends to the period before the claimant suffered a loss.

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Updated P.R.I.M.E. Finance Arbitration Rules launched for 2022

Published on 09 December 2021. By Jonathan Cary, Partner and Jonathan Wood, Chair of International Arbitration and Olivia Dhein, Knowledge Lawyer

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P.R.I.M.E Finance, the Hague-based Panel of Recognised International Market Experts in Finance, has launched updated P.R.I.M.E Finance Arbitration Rules (the Rules), which come into force from 1 January 2022.

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Summary judgment application does not amount to submission to English jurisdiction

Published on 09 December 2021. By Jake Hardy, Partner and Joe Cresswell, Senior Associate

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Does applying for summary judgment application before the determination of a parallel application for a stay, amount to a step in the proceedings that results submission to the jurisdiction?

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English Commercial Court upholds the validity of swap contracts entered into by an Italian local authority

Published on 12 November 2021. By Tim Potts, Senior Associate and Jake Hardy, Partner

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The Commercial Court has found that there was no limitation on the capacity of the Italian local authority Busto di Arsizio to enter into a valid swap contracts with Deutsche Bank.

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Disputes Yearbook 2021: Financial disputes

Published on 05 May 2021. By Simon Hart, Partner

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As part of the acclaimed Disputes Yearbook, Legal Business interviewed members of our disputes team exploring the litigation landscape and what RPC brings to the table.

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