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Welcome to the Spring 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
- High Court applies "scope of duty" principle to limit damages claimed for breach of so-called Quincecare duty
- Court of Appeal dismisses borrower's application to control sale of commercial property in place of lender's appointed receivers
- Court of Appeal partially dismisses judicial review challenge to FOS decision relating to client classification
- Court of Appeal confirms transferee lender may maintain inherited SVR and clarifies limits of CCA unfair relationship remedies for regulated mortgages
Mis-selling and misrepresentation
- Court of Appeal decision acts as reminder that acceptance of repudiatory breach must be communicated to end contract
- Privy Council holds that there is no legal requirement in the tort of deceit to show that a claimant was consciously aware of the representation made
- High Court dismisses claim by Danish tax authority seeking recovery of £1.4 billion of dividend withholding tax refund paid under invalid claims from cum-ex trading
Contractual construction
- High Court finds default interest clause in loan agreement is not an unenforceable penalty
- Supreme Court finds there is no principle in English law that a condition precedent to payment of a debt will be deemed fulfilled if fulfilment was prevented by a party's own breach
- Court of Appeal overturns High Court’s interpretation of deferred consideration clause
- Court of Appeal confirms party cannot waive contractual right to terminate unless it is actually aware of the right
- Court of Appeal recognises "onerous clause doctrine" where terms are incorporated by reference
- High Court dismisses claim by advisory firm and broker-dealer for USD 11.6m success fee for provision of M&A services outside scope of agreement
- High Court considers interaction between the reflective loss principle and the Contracts (Rights of Third Parties) Act 1999
- Supreme Court considers approach to interpretation of industry-wide standard form contracts
- High Court rejects attempt by Noteholders to remove and replace Trustee against wishes of Issuer
- High Court finds buyer remains liable to pay seller directly where issuing bank refuses payment under Documentary Letters of Credit
- High Court refuses administrators' application to close out FX contracts before maturity
- High Court upholds broker’s entitlement to US$2.25m success fee under tripartite mandate despite limited involvement in funding process
- High Court considers whether success fee payable to advisory firm in respect of "Equivalent Transaction" in de-SPAC merger
- High Court considers summary judgment application on whether success fee payable by private equity fund to placement agent
Impact of sanctions on financial services agreements
- County Court rejects discrimination claim on procedural grounds but finds refusal of financial services because a company is Russian owned would amount to direct discrimination
- High Court finds UK broker did not breach contract by refusing to return funds to client subject to US sanctions
- High Court rejects Russian bank's judicial review challenge to OFSI licence amendments
- High Court strikes out illegality defence premised on alleged breaches of US sanctions
- Supreme Court confirms suspension of payment obligations under letters of credit due to UK Russian sanctions regime
Securities litigation and class actions
- Supreme Court reshapes UK competition class actions landscape
- Points of interest from the Autonomy consequentials judgment for financial institutions involved in defending Section 90A / Schedule 10A FSMA shareholder claims
Costs and funding
- Supreme Court confirms proper approach to determining appropriate currency for costs order
- Government to legislate for enforceability of litigation funding agreements based on a share of damages
Disclosure and privilege
- Disclosure Review Working Group seeks views on disclosure under PD 57AD
- High Court finds party has practical control over third parties' documents for disclosure purposes
- New York court finds client chats with generative AI tool Claude are not privileged
- Upper Tribunal observes that uploading confidential documents into open-source AI tools waives client confidentiality and legal privilege
- High Court finds company could not assert privilege against former director over legal advice she had seen at the time
- US courts find privilege applies to use of public AI tools by self-represented litigants
- High Court finds legal advice privilege is not limited to lawyer/client communications but extends to "intra-client" communications
- Upper Tribunal finds privilege applied to whether Boris Johnson sought legal advice on the lawfulness of the Covid-19 lockdown
Governing law, jurisdiction, and enforcement
- High Court upholds contractual limits on challenging enforcement action in cross-border finance transaction
- Court of Appeal upholds contractual limits on challenging enforcement action in cross-border finance transaction
- Commercial Court dismisses application for stay on basis of English jurisdiction clause and forum non conveniens waiver clause
- Court of Appeal finds English courts lack jurisdiction over sanctioned individual who is not permitted to enter the UK
- High Court discharges worldwide freezing order for lack of jurisdiction
- Commercial Court finds good arguable case that, where cryptoassets were taken from an English resident, damage was sustained in England
Other significant developments
- High Court confirms that non-authorised fee earners cannot conduct litigation
- County Court considers bank's possession rights in context of a mortgage that is securitised or subject to covered bond
- Privy Council delivers a useful reminder of the limits of the Re Duomatic principle of informal shareholder assent
- Commercial Court pilot will mean many more court documents publicly available by default from 1 January 2026
- Court of Appeal confirms defendant not required to take any steps in proceedings unless claim form validly served in time
- 2025 Global Bank Review - Innovating amid turbulence
- High Court dismisses judicial review challenge of FCA's Naming Announcement
- UK Jurisdiction Taskforce consults on draft legal statement on liability for AI harms
- Court of Appeal refuses permission for new defendant to be substituted after expiry of limitation period
- Civil Justice Council publishes consultation on use of AI for preparing court documents
- UK Jurisdiction Taskforce publishes Report on Control of Digital Assets
- Court of Appeal confirms unauthorised individuals can lawfully perform tasks that amount to the conduct of litigation, provided they do so for and on behalf of, and under the supervision of, an authorised person who is “carrying on” that litigation
- Digital property and the limits of conversion: High Court strikes out conversion claim for misappropriation of Bitcoin
- Law Commission to consider introduction of opt-out consumer class actions regime
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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