Working with litigation analytics company, Solomonic, CMS has published its Banking Disputes Report 2024, a data-driven review of the Banking and Finance sector’s dispute-related activity to identify key trends, how banking disputes are being determined in 2024 and what might lie ahead.
Key findings of the 2024 report:
- The Banking and Finance sector had the highest volume of new High Court claims filed in 2023. This trend has continued into Q1 2024. Our report looks at the types of claims being filed.
- 2023 demonstrated the “long tail” of market events with claims still being filed following the collapse of Lehman Brothers. In contrast, there is also evidence of a more recent trend of claimant law firms looking to file claims quickly after market events to establish themselves as the lead claimant firm on a matter.
- The Financial Ombudsman Service has reduced pending complaint volumes and wait times for decisions over the last year. During 2024, the FOS is expecting a growing number of complaints regarding fraud, a rise in complaints regarding irresponsible lending, a rise in complaints regarding account closures, and at least the same volume of complaints regarding motor finance.
- Use of the British Banking Resolution Service by SMEs remains subdued and the future of the BBRS remains uncertain.
- Various interest groups are calling for a new banking dispute resolution tribunal to be formed.
- Arbitration is consistently used by the Banking and Finance sector to determine disputes. Data from the LCIA shows that the Banking and Finance sector has accounted for 25% of its total caseload on average over the last 6 years.
We also take a deeper dive into the following banking litigation hot topics for 2024:
- Debanking - the claims data for 2023 shows a number of claims having been filed in the High Court following a customer banking relationship having been terminated, but a 2024 judgment has put a marker down regarding some of the challenges faced by such claims.
- Class actions - class action risk is on the rise generally and banks continue to feature in pending claims across all available UK class action regimes. This trend is very likely to continue throughout 2024 and beyond.
- Motor finance commission claims - motor finance commission claims are increasing and 2024 will be an important year in determining whether these claims are viable and shaping where and how such claims are to be determined.
- ESG litigation - we remain at the early stages of ESG litigation action against banks and other financial institutions in the UK. As we move through 2024 and into 2025 it is likely we will see some form of regulatory action taken by the FCA under the soon to be introduced anti-greenwashing rule and litigation either via activists or claimants seeking commercial returns.
- The future of the Quincecare duty - important case law in 2023 narrowed the boundaries of claims based on a breach of the Quincecare duty. However, we are likely to see a continuation of these claims in 2024 and beyond and therefore we look at the available judicial guidance as to what might amount to red flags putting a bank on inquiry of potential fraud and how claims might be reframed on the basis of an alleged “retrieval duty”.
- Redress schemes - following the public and political spotlight placed on redress schemes in 2023 and into 2024 as a result of the Post Office/Horizon scandal, we look at the APPG’s 2023 report into redress schemes and what a good scheme looks like from a consumer’s perspective.
Click here to download the report.
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