The lower limit for claims heard by specialist judges at the Rolls Building through a new ‘financial list’ should be £10m rather than the £50m proposed, the City of London Law Society (CLLS) has suggested.
In its response to the judiciary’s consultation on the issue, the CLLS said the £10m threshold over which costs budgeting does not automatically apply, might be the “more appropriate limit”.
The litigation committee of the CLLS also called for a review of the Commercial Court’s procedures, to ensure they were suitable for financial cases.
“The creation of a financial list offers an opportunity to create procedures that meet the needs of this particular category of case, rather than to impose on it the general procedures applicable to all litigation, as happens currently.”
The committee agreed that “private equity deals” should fall within the list but called for other transactions not involving private equity to be in included.
The CLLS said it was “the nature of the transactions that private equity undertakes that should lead to their inclusion”, not the fact they were undertaken by private equity providers.
“So, for example, the sale of a business between two corporates should fall within the financial list even though no private equity firm is involved.”
The CLLS called for “mandatory publicity” for all test cases, either on the judiciary’s website or by notifying a user’s committee and for trade bodies to be allowed to bring market test cases, rather than merely being joined to test cases brought by others.
“In practice, it may be that few financial institutions will be prepared to bring test cases for the good of the market as a whole, whether through a dislike of publicity or because the costs will generally be irrecoverable.
“Trade bodies are ideally placed to bring test cases, both because of their market perspective and because they can spread the cost across the industry as a whole.”
The committee said “some scepticism” was expressed as to whether the test case procedure would be prove attractive or practicable, but a pilot scheme should “flush out” whether or not this was the case.
The CLLS made it clear that it supported the creation of the financial list.
“It is important for the English courts to improve, and be seen to improve, the service they provide to international litigants rather than merely to rest on the courts’ historic laurels.
“In particular, litigants expect judges to be familiar with the subject matter of a case. The financial list potentially offers litigants the assurance that cases will be heard by a judge with an understanding of the global financial markets, rather than a judge who happens to be available, and demonstrates the benefits that the English courts can bring to dispute resolution in those markets.”