Ruth Bala

Ruth has represented banks and finance institutions in a number of the leading cases in the area.

Featured Retail Banking and Financial Services cases

R (Clydesdale Financial Services Ltd t/a Barclays Partner Finance) v Financial Ombudsman Service Ltd [2024] EWHC 3237 (Admin), on appeal to CA: Junior counsel for Barclays (with Ben Jaffey K.C. and Marlena Valles of Blackstone) in the judicial review of FOS’ decision-making on motor commission complaints involving the payment of ‘discretionary’ commission linked to the interest rate negotiated by the dealer. The issue on liability is whether FOS erred in its construction of CONC 4.5.3 R, which only required disclosure of the “existence” of commission, prior to an amendment inserting the words “and nature”. FOS was upholding pre-amendment complaints on the basis that the discretionary model was not disclosed. The issue on quantum is whether FOS was irrational to award redress on the basis that the discretionary commission would have been negotiated to zero.

Mr X & ors v FCA, Upper Tribunal (Tax and Chancery): representing a former partner of St Martin’s Partners in a challenge to the FCA’s decision to issue a full prohibition order and a fine following his firm’s involvement in advising on defined benefit pension transfers. The FSCS has paid over £13.4m to the firm’s clients. Issues include the extent to which a partner can rely upon a separate compliance function and the relevance of defined benefit schemes not falling within the FCA’s definition of a “designated investment” at the time, meaning that COBS chapter 9 was inapplicable to the firm. There is also a dispute about the extent to which the FCA is entitled to impose regulatory sanctions for conduct that would only have amounted to a breach of COBS following subsequent amendments.

Mr Y & ors v FCA, Upper Tribunal (Tax and Chancery): representing a former employee of SVS Securities plc in a challenge to the FCA’s decision to issue a prohibition order and a fine following his firm’s involvement in investing over £69m of customer funds into ‘illiquid’ bonds in model portfolios. Issues include the legitimacy of profit generated by SVS by purchasing investments from disinvesting investors on behalf of the remaining investors, and the relevance of there being no alleged breach of COBS by the FCA in this regard.

Blue Sky Equity Trading LLP v Credit Suisse (UK) Ltd [current]: £12.7m High Court claim for (i) undisclosed slashes of the ‘Lending Values’ attributed to a certain stock and (ii) unreasonable refusal to accept £10m worth of unencumbered property from a retail client as collateral following a margin call in the sum of £1.2m. This occurred at the time of the coronavirus crash, forcing sale of a share portfolio at a severely depressed price. Allegations of breach of a ‘mezzanine’ duty in tort.

Wills & Trust Independent Financial Planning Ltd v FOS: representing the applicant financial planning firm in a judicial review of a FOS decision. Grounds include (i) irrationality in finding a misrepresentation where there was no false statement, (ii) determining allegations which were not raised in the “complaint”, (iii) failure to explain departure from COBS 4.2.1 R, which only imposes “fair, clear and not misleading” obligations upon communications, and does not apply where there is an absence of communication and (iv) irrationality on quantum.

Property Alternative Holdings (in administration) (High Court): acting for the administrators in a series of FSMA applications arising from a fractional ownership scheme involving care homes (led by insolvency silk Eleanor Temple K.C.)

Nash v Volkswagen Financial Services (UK) Ltd [2023] EWHC 2326 (KB): Ruth successfully represented Volkswagen FS in a defective vehicle dispute; the appeal concerned the correct approach to factual causation where there were competing theories- See news post. 

Kerrigan & 11 ors v Elevate Credit International Limited (t/a Sunny) (in administration) [2020] EWHC 2169 (Comm); [2020] C.T.L.C. 161: Ruth was lead counsel for the creditor in this payday lending test case litigation on the relationship between the FCA’s Handbook rules and the ‘unfair relationship’ provisions. Twelve ‘Sample Cases’ were tried over the course of four weeks. Summary of judgment here.

MFS Portfolio Ltd v Phelan [2019] GCCR 17149: four day appeal upholding the applicability of the exemption in paragraph 55 of the Schedule to the Financial Services and Markets Act 2000 (Exemption) Order 2001. This exemption from the need for FCA authorisation is commonly relied upon by debt purchasers who enter servicing arrangements with authorised servicers. The borrowers unsuccessfully argued that debt purchasers are not entitled to rely on this exemption when issuing proceedings: issuing is an activity that cannot be delegated to the servicer, but has to be undertaken by the purchaser, who has title to the debt.

Pyne & ors v Curo Transatlantic Ltd t/a Wageday Advance (unrep, High Court, Business and Property Courts in Birmingham, 30 November 2018): represented a payday lender in a group of 231 claims alleging payday loan ‘mis-selling’. Applied for a ‘Scheme Stay’ so that the claims could be processed by the lender as complaints and thereafter referred to the Financial Ombudsman Service.

Conlon v Black Horse Ltd UKSC 2014/0038: conjoined appeal with Plevin v Paragon Personal Finance Limited [2014] 1 W.L.R. 4222; settled three days before hearing in the Supreme Court.

Conlon v Black Horse Ltd [2013] EWCA Civ 1658: Ruth was led by David Bailey QC in having the borrower’s appeal dismissed; the Court of Appeal declined to distinguish Harrison v Black Horse Ltd on the grounds there was oral evidence from the borrower as to how she would have reacted had she known of the commission and evidence of the bank’s motivation in deciding not to disclose.

Conlon v Black Horse Ltd [2012] GCCR 11423: Ruth successfully represented appellant in High Court, appearing as sole counsel against Hodge Malek QC; appeal allowed against a trial judge’s finding of an ‘unfair relationship’.

Harrison v Black Horse Ltd [2011] EWCA Civ 1128; [2012] Lloyd’s Rep I.R. 521; [2011] C.T.L.C. 105: Led by Nicholas Elliott QC in the Court of Appeal, where the lender successfully resisted the borrowers’ second appeal: non-disclosure of 87% commission did not give rise to unfair relationship; if there was no non-compliance with ICOB it was difficult to see how there could be an ‘unfair relationship’; Appeal to Supreme Court compromised.

Harrison v Black Horse Ltd [2010] EWHC 3152 (QB); [2011] Lloyd’s Rep I.R. 455; [2011] C.T.L.C. 1: Ruth appeared as sole counsel in High Court: although PPI being recommended was very expensive by comparison with monthly premium products, this did not give rise to a breach of ICOB or an unfair relationship; receipt of 87% commission from insurer did not give rise to a conflict of interest under ICOB.