The day-long conference provided a fantastic opportunity for delegates from each country to discuss the challenges they face in their respective countries when litigating against banks as well as knowledge sharing. Particular points of interest were topics such as economic duress, disclosures and litigation funding. The key points from each have been set out below.
Economic Duress & Coercion
A common theme for many delegates was economic duress and coercion claims against Banks. There was discussion about common law on economic duress in the UK as well as in other jurisdictions and the Courts’ general reluctance to accept that both parties to a banking contract did not have equal bargaining power.
There was also good news as decision favouring the customer had been issued at the start of this month in Ireland. In that case the Court was willing to accept that it is possible that a Bank may coerce a customer into undertaking certain steps it would not otherwise and as a result assigned the case to trial to determine whether coercion and intimidation had taken place in that particular case.
While Disclosure exercises before and during litigation are common in many countries, including England and Scotland, they are not part of the law in several other European countries. One of the difficulties that the Swiss and Spanish delegates faced in their respective countries was the lack of disclosure. There was no duty on the Banks to disclose any documents relating to the dispute. Neither was there any mechanism by which to ask the Courts to force the Banks to disclose such documents. That had understandable percussions on litigation in cases where the customers had not kept excellent files themselves.
The other extreme, however, was excessive disclosure of irrelevant documents by Banks in countries like Northern-Ireland and the UK. It was not uncommon for Banks to disclose thousands and thousands of irrelevant documents and effectively “hide” the relevant documents amongst the irrelevant ones. The customers’ solicitors will thereafter be faced with the task of finding a needle in the haystack and occasionally also convincing the Courts that while thousands of documents were produced, some of the relevant documents are still outstanding. The latter in particular posed difficulties in Northern-Ireland and Ireland where the Courts are still very reluctant to find against banks.
As with the Disclosure issue, the rules in relation to litigation funding varied considerably between jurisdictions. While several countries, including England and Scotland allow for law firms to enter into contingent fee arrangement with their clients, these arrangements are not permitted in a number of other countries, such as Northern-Ireland. That creates some real funding issues as it is more often than not the case that the person looking to litigate against banks does not have the same financial means to fund litigation as the banks.
Third Party Litigation Funding and After the Event Legal Insurance were also discussed. Third Party Litigation Funding in particular was an emerging market that was explored and discussed in detail. One of the difficulties highlighted was that Third Party Funders were often looking for claims in excess of £5 Million and while there were many such large scale claims there were also a lot of slightly smaller scale claims (£500,000 - £3 Million) for which it was a lot harder to find funding.
The Conference was a great success and MBM look forward to working and sharing knowledge with the existing and future members of the Network. A total of 16 jurisdictions were represented at the Conference which provided a great opportunity for the delegates to get to know one another and share their experiences. Strong working relationships were formed that will only be strengthened over time as the Network continues to share ideas, knowledge and work.
If you have any queries arising from this article, please contact our Dispute Resolution team on 0131 226 8200.
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