Barclays Bank Plc, Re

In prospective directions applications concerning ring fencing transfer schemes, the starting point for notification is that individual notice should be given to all customers and consumers who might reasonably wish to allege that they would be adversely affected. The banks should not initially restrict notification to persons whom they themselves identify as likely to suffer adverse effects. The court may later approve specific exclusions on adequate evidence. Electronic notification is permissible where appropriate, subject to a reliable printed alternative. At least 42 days should ordinarily elapse between notification and the representation date. A representation date may organise the proceedings, but cannot remove the statutory entitlement to be heard of a person who complies with Financial Services and Markets Act 2000, section 110(5). The court retains power to manage late representations, waive procedural defects, and protect confidential information where necessary.

Four major banking groups issued prospective claim forms concerning intended applications for court sanction of ring fencing transfer schemes under Part VII of the Financial Services and Markets Act 2000. They sought directions concerning notification, electronic communications, advertising, publication of scheme information, confidentiality in scheme reports, representation dates, timetabling and preliminary applications.

The applications arose before the banks could make their substantive sanction applications, because PRA consent was required and depended on consideration of scheme reports. The central preliminary issue was whether individual notice could be limited to persons whom the banks considered likely to be adversely affected, or whether the statutory right of persons alleging adverse effect required a wider starting point.

1. Jurisdiction and procedure. The court had inherent jurisdiction to regulate the prospective proceedings and give procedural directions. The two-judge constitution was also supported by section 66(1) of the Senior Courts Act 1981 and CPR Part 3.1(2)(m), to manage the cases and further the overriding objective. The directions were provisional and subject to revision when the individual communication plans and affected persons were considered.
2. Notification. Section 110(4) of the Financial Services and Markets Act 2000 entitles any person who alleges that they would be adversely affected by the carrying out of a ring fencing transfer scheme to be heard. At this stage, the banks could not limit individual notification to persons they had determined were likely to be adversely affected. The proper starting point was individual notice to all customers and consumers within section 1G who might wish to make that allegation. The court could later approve specific exclusions if justified.
3. The same principle applied to stakeholders other than customers and consumers. The banks were required to devise a suitable plan for identifying such persons. Electronic or digital notice was appropriate where the recipient had supplied or habitually used an electronic address, provided that a printed method remained available where necessary.
4. Timing and case management. Six weeks was the minimum appropriate period for customers and consumers to understand the information and prepare representations. Because written representations had to be filed before the sanction hearing, notice should be given at least 42 days before the representation date. Section 110(5) did not permit a person who complied before the hearing to be barred merely for missing that date. The court could regulate the manner and time of late participation and impose costs consequences.
5. The court approved, in principle, website publication with hard-copy documents available on request, safeguards for persons with special needs, a power to waive procedural defects, confidentiality protections for scheme reports subject to the court’s power to order disclosure, and liberty to apply on reasonable notice to the regulators. Snowden J agreed.

First-instance prospective directions applications. No prior decision or appeal is stated in the judgment.