Biannual Banking Litigation Update – Autumn 2025

The content of this edition of our Banking Litigation Update is as follows:

Duties in financial services

• High Court rules in favour of APP fraud victims in "derivative" action against PSP for breach of so-called Quincecare duty

• Supreme Court confirms fiduciary must account even for profits that would have been made without the breach of duty

• County Court considers limitation period for unfair relationship claim in secret commission case

• An overview of potential disputes caused by market dislocation

• High Court considers how sale proceeds should be accounted for as between first-ranking secured creditor and second-ranking judgment creditor

• Privy Council clarifies that a mortgagee seeking to realise its security does not need to improve asset in order to obtain best price reasonably obtainable

• Section 172 "good faith" duty: Court of Appeal clarifies honesty requirement, which must be assessed objectively

• High Court dismisses US$21m claim for mistaken payments made to a commodities trader in fraudulent trade finance scheme

• Supreme Court clarifies remedies available against dishonest assistant for breach of a constructive trust

• Supreme Court decision in Hopcraft motor finance commission appeal – key implications for financial services firms

• High Court permits documents obtained via Norwich Pharmacal Order to be used against disclosing bank in related APP fraud claim

• High Court grants bank stakeholder relief under CPR Part 86 in USD 11 million deposit dispute involving competing claims

• High Court finds "retrieval duty" arguable against sending bank in an APP fraud context

• Fiduciary relationships reshaped

Impact of sanctions on financial services agreements

• High Court declines to vary interim payment order despite sanctions concerns

• High Court refuses to set aside statutory demand issued by "designated person" for the purpose of UK Russian sanctions

• English High Court decides in favour of banks in EuroChem bond claim, confirming payment under on-demand bonds prohibited due to Russian sanctions

Contractual construction

• High Court finds third party can enforce lender's rights under loan agreement pursuant to Contracts (Rights of Third Parties) Act 1999

• Agreements to agree: Court of Appeal finds supply contract enforceable despite leaving price to be fixed

• High Court finds breach of express obligations of good faith but no loss

• High Court refuses bond issuer's interim mandatory injunction application seeking to compel release of funds by settlement agent

• High Court finds private equity fund bound by its agent acting with apparent/ostensible authority

• Court of Appeal finds PSP liable for deceitful representations made by agent acting with apparent/ostensible authority

• Court of Appeal finds binding contract concluded by exchange of emails despite referring to preparation of formal agreement

• High Court finds investment bank entitled to success fee under mandate executed by company's agent acting with apparent authority

• High Court holds that exercise of rights under charge document is not subject to Braganza duty

• High Court sets aside default judgments entered against guarantors under a facility agreement on the basis that service of the claim was not valid

Mis-selling and misrepresentation

• High Court dismisses judicial review of FCA decision relating to IRHP voluntary redress scheme

• Hedging: where is the dividing line?

• Greenwashing at a glance - regulatory sanctions and claims in financial services across Europe

• High Court refuses to strike out lender's claim against law firm for tort of unlawful interference in respect of irresponsible lending claims they advanced on behalf of the lender's customers

Securities litigation and class actions

• High Court declines to restrict "passive" investors from bringing claims under s.90A/Schedule 10A FSMA

• FCA publishes new UK prospectus rules: potential impact on securities litigation

• Privy Council abrogates so-called "Shareholder Rule" under English law: companies can assert privilege against their shareholders

• Financial List finds claim for declaratory relief brought by ultimate beneficial owners of loan notes against issuer is arguable

• HSF Kramer contributes chapter to The Securities Litigation Review (11th Edition)

• Class Actions radar: Scanning global trends and risks

Costs and funding 

• Civil Justice Council's final report on litigation funding recommends "light touch" statutory regulation

• High Court finds there is no discretion to order security for costs in favour of an interested party

• Court of Appeal confirms litigation funding agreements are not DBAs if based on a multiple of funding rather than a percentage of damages

Disclosure and privilege

• Without prejudice privilege rejected for survey reports commissioned unilaterally to assist with prospective negotiations

• High Court grants permission to rely on inadvertently disclosed privileged documents where the mistake was not obvious

• High Court finds iniquity exception to privilege applied, but not on a blanket basis

• High Court declines to set aside order giving effect to letter of request despite failure to give full and frank disclosure

• Court of Appeal overturns decision refusing order for Extended Disclosure to aid construction of insurance policy

Governing law and jurisdiction

• High Court decision underlines that the English court may refuse to enforce a foreign judgment even if the relevant foreign rules on jurisdiction and service were complied with

• High Court declines to extend time for defendant to challenge court's jurisdiction, despite claim form having been served out of time

• Court of Appeal decision shows possibility of parallel proceedings inherent in asymmetric jurisdiction clauses

• High Court grants banks' request to revoke final anti-suit injunctions in their favour but refuses to revoke declarations on jurisdiction

• Asymmetric jurisdiction clauses: when will they be effective?

• High Court finds lender's claim not barred due to sovereign immunity

• Hague 2019 Judgments Convention comes into force in UK

• Court of Appeal confirms court has no jurisdiction despite English jurisdiction clauses as defendants were not parties to relevant contracts as undisclosed principals

• High Court finds English court has exclusive jurisdiction in ISDA swaps case

• High Court interprets rules allowing service out of the jurisdiction without the court's permission based on a contractual jurisdiction clause

• High Court finds claim brought by director under Contracts (Third Party Rights) Act 1999 to enforce an SPA warranty could be served out of the jurisdiction without the court's permission

Procedural developments

• High Court finds parties not bound by expert determination which contained manifest errors

• Court lambasts citation of fake authorities in proceedings and orders wasted costs

• Court of Appeal decision shows importance of applying promptly to set aside a default judgment

• High Court discharges lender's freezing injunction due to failure to meet duties of full and frank disclosure and fair presentation

Other significant developments

• Supreme Court confirms the types of defendant who can be liable for fraudulent trading

• UK Supreme Court quashes LIBOR and EURIBOR convictions: implications for financial crime enforcement

• Solicitors Regulation Authority reviews high-volume consumer claims sector

We hope you find our update useful and, as ever, please feel free to contact your usual HSF Kramer contact if there are any topics that you would like to discuss further.