Biannual Banking Litigation Update (Autumn 2026)

Welcome to the Autumn 2026 edition of our biannual Banking Litigation Update, in which we highlight the most important cases and developments affecting UK financial institutions over the past six months.

Read the full Banking Litigation Update here.

We have also recorded a short video to provide a high-level overview of developments during this period, which you can access here:

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

Duties in financial services

• Behind the Synthetic Capital Relief: Understanding the Litigation Risk Landscape
• Court of Appeal finds no breach of so-called Quincecare duty in “derivative” action brought by APP fraud victims against PSP
• High Court rules that administrators can recover funds in an insolvent company’s bank accounts despite potential third-party proprietary claims
• County Court holds no statutory limitation period applies to unfair relationship claims under s.140A CCA

Contractual construction

• High Court dismisses injunction application to prevent current account closure on grounds of financial crime concerns
• High Court refuses to grant injunction against bank preventing payout under performance bond
• High Court decisions illustrate limitations of Chartbrook principle which allows court to correct drafting errors by interpretation
• Court of Appeal confirms default interest clause in loan agreement is not unenforceable penalty
• High Court clarifies meaning of “unforeseeable” in force majeure clause
• Court of Appeal considers whether confidential information relating to an investment opportunity and subject to a non-disclosure agreement was misused
• High Court considers fair market valuation of sub-participation right at maturity date
• Court of Appeal finds administrator appointment arguably invalidated because of appointor’s improper purpose
• High Court finds no prospect of establishing implied terms of good faith in framework agreements for network services

Impact of sanctions on financial services agreements

• The European Court of Justice confirms that trust structures cannot shield sanctioned assets
• High Court finds loan repayment obligation not suspended by borrower's sanctions designation
• English Sanctions Litigation and Russian Enforcement Battles

Securities litigation and class actions

• FCA to Review Claims Management Practices 
• High Court adjourns landmark securities class action trial due to risk of prejudice to overlapping criminal proceedings
• Multi-party claims: Court of Appeal upholds decision allowing over 5,000 motor finance claims to be brought together
• High Court considers appropriate split for trial of s.90 and 90A FSMA claims in Entain litigation
• Solicitors Regulation Authority consults on consumer protection measures where litigation funding used for consumer claims
• UK government consults on measures to speed up and simplify competition class actions regime 
• Group litigation orders: Supreme Court clarifies when courts may order that a judgment on a GLO issue is not binding on other parties due to a subsequent change in the law 
• All aboard the omnibus claim form?
• New third edition of our leading textbook Class Actions in England and Wales published

Private Capital

• High Court orders pre-action disclosure in respect of Liability Management Exercise
• Commercial Court refuses to continue proprietary injunctions against investors in collapsed mortgage lender MFS
• High Court finds transfer of assets to continuation fund to be void
• High Court grants case management stay in liability management exercise dispute pending New York litigation

Artificial Intelligence

• Increasing use of AI in financial services: Managing the regulatory and litigation risks
• Civil Justice Council publishes update on consultation responses regarding use of AI for preparing court documents
• UK Jurisdiction Taskforce publishes final legal statement on liability for AI harms
• A witness's own use of AI to prepare for cross-examination may amount to prohibited witness coaching 
• Lawyer struck off in first disciplinary case on AI misuse

Disclosure and privilege

• Disclosure Review Working Group considering simplification of PD 57AD disclosure regime following survey 
• Handy client guide to privilege – newly updated 
• Litigation funding and privilege: High Court finds litigation privilege does not apply to communications prepared to enable funders to assess whether to support a claim 
• High Court orders party's directors to hand over mobile devices to an independent reviewer
• Disclosure Review Working Group publishes summary of stakeholder survey results
• High Court decision underlines need for investor-appointed directors to think carefully before disclosing the company's privileged material
• Pre-action disclosure: no jurisdiction to hear application where respondent and documents both located abroad
• Carter Ruck v SRA: High Court decision means SRA cannot compel production of privileged documents

Governing law, jurisdiction, and enforcement

• Commercial Court refuses to stay English proceedings or injunct foreign proceedings envisaged by asymmetric jurisdiction clause
• Court of Appeal finds wholesale update of banking terms amounted to conclusion of new contract for purposes of consumer jurisdiction rules
• Court of Appeal rejects ASI application to prevent Moscow proceedings to enforce security in connection with English law governed facility agreement
• Supreme Court allows bankruptcy petition to be founded on unrecognised and unregistrable foreign judgment
• Jurisdiction appeals: Court of Appeal decision illustrates steps defendants should take to protect their position pending appeal 
• High Court grants anti-suit injunction to prevent foreign proceedings from undermining letter of credit payment obligations
• European Commission consults on possible reforms to the recast Brussels Regulation

Costs and funding

• Refusal to mediate was not unreasonable and did not warrant costs sanction
• High Court orders claimant to pay defendant's costs after recovering just 1.6% of its professional negligence claim

Other significant developments

• Court of Appeal holds fraudsters' intervention broke chain of causation 
• HM Treasury pitches base camp at the mountain of consumer credit reforms
• Privy Council confirms directors have no standing to bring claims in the name of a company in liquidation
• Court of Appeal finds court retains jurisdiction to order further examination of judgment debtor until information provided 
• Commercial Court issues first judgment on Filing Modification Orders under document access pilot 
• Supreme Court confirms narrow limits to doctrine of issue estoppel
• Herbert Smith Freehills Kramer relaunches ADR Practical Guides and Conflict Management Toolkit

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.