FINANCIAL SERVICES DISPUTES IN THE UK
CD: In your opinion, what have been the overriding themes shaping UK financial services disputes over the past 12 months?
Humphries: The last 12 months have seen a continuation and evolution of many of the themes which emerged in the fallout from the 2008-2009 financial crisis and the ensuing glare of the regulatory spotlight, specifically those relating to mis-selling and benchmark rate manipulation. Whilst there is a feeling that overall claim volumes may have steadied, limitation-related issues continue to provide momentum, both for claims originating in post-financial crisis conduct and those which may have been subject to standstill agreements pending, for example, the outcome of a regulatory review process. We have seen this particularly in relation to interest rate hedging product (IRHP) litigation.
Oldnall: The ongoing fallout from transactions, products and behaviours that emerged during the boom times continues to dominate disputes in this sector. This is not a new trend. Since 2008 the boom time culture and behaviour of financial institutions has cast a long shadow over the London commercial litigation market. The most notable examples, of course, relate to LIBOR and the mis-selling of interest rate hedging products (IRHP) which have both spurred a considerable amount of litigation. On one view, the most lasting impact of the global financial crisis is that the relationship between financial services companies and their customers has changed; clients are now much more comfortable suing their bankers and advisers.
Finkler: We have continued to see disputes arising – or at least being litigated – which have their roots in the financial crisis. Litigation relating to the failure of Lehman Brothers, the collapse of the Icelandic economy and mis-selling of financial services and products have all loomed large in the last 12 months. The limitation period in which claims of this vintage can be brought in the English courts is now ending, however many cases already in the courts could still have many months to run. In any event, there is unlikely to be any significant let-up in financial services disputes – new disputes relating to alleged mis-selling will surely arise, many perhaps with a basis in the fixing of benchmark rates.
Jul-Sep 2016 issue
Mishcon de Reya
Slaughter and May