The new Financial List is a fillip for the capital but the initiative could go further.
The introduction of the Financial List at High Court level is unquestionably welcome.
It confirms that London remains hungry for the complex financial disputes which centres such as Singapore and Dubai are clamouring for, and that our practitioners have the imagination and farsightedness to contemplate new approaches. The test case procedure is a prime example of this.
Of course, one can pick at the detail, and arguably the £50m threshold is too high. Broadly, though, the scope and structure is acceptable. Perhaps another question is whether the initiative goes far enough.
At High Court level there has been frustration among many clients that they cannot access judges who truly understand the financial market practices that underlie disputes. The Commercial Court has always provided a strong pool of judges who can assuage that concern. Even so, arguably not enough has been done to support the development of judges who are dedicated to the types of case which would allow them to become truly exposed to the ways and dealings of the financial markets.
This experience would have a clear bearing on the construction of contractual arrangements and the ability of a judge to test the relative merits of the differences between the parties to a dispute.
But none of this is irrelevant to the Court of Appeal, and arguably, the issue is of greater concern in that court. Unlike the Commercial Court, its judges have an even broader remit and are drawn from a diverse background of experience. Finding a panel of judges at the appeal stage with the right experience and background is often a low priority when the real challenge is trying to find any judges at all to deal with appeals within the desired timescale. In fact, the significant lack of resources at the Court of Appeal has been recognised in practice guidance to come into effect from 1 August. This allows for longer waiting times, depending on the type of case.
The problem in the appeal court is also more profound. It is one thing for an appellate judge to have a ‘commercial’ background. It is quite another to have been steeped in the diverse and increasingly complex ways in which the financial markets are evolving. At trial, judges are assisted on the technical issues by hearing factual witnesses and experts and testing them – and asking questions designed to fill in gaps in the court’s understanding.
That process is fundamentally different in the appeal court, which is dealing with issues of law and trying to understand, for example, the factual matrix taken into account by a trial judge on issues of construction. But the trial judge may have failed to fully express the particular context that resonated with him or her at trial in rendering the judgment under appeal.
This is not a criticism of the trial judge. Rather, it is the fact that there is only so much that busy judges can do to capture in their judgments all the intricacies.
Regrettably, it is not enough to rely on the parties to the appeal to inform the court about market practice and complicated financial matrix that is often at play in complex cases. At the appeal stage, the issues become distanced from the factual and expert evidence. This allows for interpretations to be advanced which will be designed to support the respective positions of the parties, given the adversarial nature of the process.
The solution may be to work towards some form of Financial List in the appeal court. This would link in with Rolls Building Financial List, for example, to ensure that at least two specialist judges would hear appeals from cases coming up from that list. Investment in an extension of the Financial List framework would be consistent with our position as a leading financial centre.
Abdulali Jiwaji is a partner at London firm Signature Litigation, specialists in high-value commercial litigation and arbitration