Disputes Yearbook 2025 – The View From London

From motor finance litigation and AI to legislative reform and international conventions, we pick out the key themes and cases from across the year

2025 has been another eventful year for commercial disputes. Class actions have continued to make the news, with some very large group actions progressing through the courts. The Supreme Court has given judgments relating to broker commissions in motor finance cases and the scope of the Building Safety Act. There have also been important decisions relating to Russian aviation insurance claims, the impact of sanctions, and environmental litigation. And, like the rest of society, the courts have had to grapple with challenges posed by the use of AI, including cases in which parties cited fake authorities.

On the legislative front, the Arbitration Act 2025 has brought in important changes, the new offence of failure to prevent fraud has come into force, and a Bill is before Parliament that would further expand corporate criminal liability. The government has proposed a package of regulatory changes for the financial services industry known as the Leeds Reforms, and the government's response is awaited to key recommendations from the Civil Justice Council for the regulation of litigation funding.

An important international convention for the enforcement of judgments, the Hague Judgments Convention 2019, has come into force for the UK and the government has consulted on implementing the Singapore Convention on Mediation.

This is just a snapshot of the major themes in disputes over the last year. You can read insights from our London disputes team on these topics as well as other major developments below.

Chapters

Alternative Dispute Resolution

Court exercises power to compel ADR and government takes steps toward implementing Singapore Convention

High Court orders parties to mediate

In October 2024, the Civil Procedure Rules were amended to confirm that the court's case management duties and powers extend not only to encouraging but also to ordering ADR where appropriate.

Since then, the courts have begun to exercise this power in practice. In DKH Retail Ltd v City Football Group Ltd [2024] EWHC 3231 (Ch) (dating from November 2024, but reported in January 2025), the High Court ordered the parties to mediate a trade mark dispute at a pre-trial review despite the defendant's objection that there was no real prospect of settlement and the parties needed a judicial determination. The court did not accept this position, noting that "mediation is capable of cracking even the hardest nuts" – a view which appears to be vindicated by a postscript to the judgment recording that the parties had indeed subsequently settled their dispute.

The decision illustrates the court's broad discretion to order parties to engage in ADR, and some of the factors it may consider when exercising such discretion.

Government consults on implementing Singapore Convention on Mediation

The Ministry of Justice launched a consultation on the implementation into UK law of the UN Convention on International Settlement Agreements Resulting from Mediation, better known as the Singapore Convention. The Singapore Convention requires member states to enforce settlement agreements that result from mediations resolving international commercial disputes. Refusal of recognition or enforcement is possible only on limited grounds. There are currently nearly 60 signatories to the Convention, with around a third of signatories having also ratified. The UK Government signed the Singapore Convention in May 2023.

Implementing and applying the Singapore Convention may prove more complicated than signing it. We have previously highlighted several areas where the Convention's provisions are ambiguous or else leave flexibility for enforcing courts to take different approaches. The approach currently proposed by the Ministry of Justice includes the introduction of a new registration process for mediated settlement agreements, with all the powers ordinarily available to enforce a court order being available to enforce a mediated settlement once it has been registered. In other respects, the proposals are lighter touch, with a number of areas to be left to the courts to consider in due course rather than being specifically provided for in implementing legislation. The outcome of the consultation is awaited.

Arbitration

The Arbitration Act 2025 comes into force and the English courts grapple with the limits of the New York Convention and issues of sovereign immunity

Amendments to the English Arbitration Act 1996

On 1 August 2025, the Arbitration Act 2025 came into force, amending the English Arbitration Act 1996 (together referred to as "the Act"). The Act applies to arbitration proceedings (and associated court proceedings) commenced after 1 August 2025. It also applies retrospectively to arbitration agreements. These amendments followed a comprehensive review and consultation process by the Law Commission. Rather than a root and branch reform, the changes are intended to fine-tune and clarify the law, ensuring that the UK remains a leading destination for commercial arbitration.

Significant changes to the Act include:

• The codification of the arbitrator's duty of disclosure (section 23A), which requires prospective and sitting arbitrators to disclose any relevant circumstances of which they become aware that might reasonably give rise to justifiable doubts as to their impartiality in relation to the potential or ongoing proceedings.
• The strengthening of arbitrator immunity around resignation and removal (section 24(5A)).
• The introduction of a statutory power of summary disposal (section 39A), confirming the tribunal's power to make an award on a summary basis (upon an application made by a party) if it considers that a party has no real prospect of succeeding on the claim, defence, or issue.
• The improvement of the framework and procedure for jurisdictional challenges under section 67. The Act permits the creation of new court rules to prevent the court from re-hearing evidence that has already been heard by a tribunal and to restrict parties' ability to raise new grounds or evidence, subject to the court ruling otherwise in the interests of justice. As at today's date, those court rules have not yet been published.
• The introduction of a new default rule (section 6A) which provides that the governing law of an arbitration agreement shall be the seat of the arbitration unless the parties agree otherwise.
• Clarification of the court's powers in support of arbitral proceedings and in support of emergency arbitrators. Orders under section 44 of the Act (such as for the preservation of evidence) are now confirmed to be available against third parties. Emergency arbitrators are also empowered both to issue peremptory orders (which can result in court-ordered compliance under section 42 of the Act) and to give permission for applications to the court under section 44(4).

The full impact of these reforms is yet to unfold. It will be interesting to observe whether, in the coming year, the English courts encounter novel issues arising from these changes. For more information see our blogpost and podcast on the recent amendments to the Act.

English Court of Appeal rules on the limits of the New York Convention

In Star Hydro Power Limited v National Transmission and Despatch Company Limited [2025] EWCA Civ 928, the Court of Appeal unanimously allowed an appeal granting an anti-suit injunction restraining the respondent from pursuing proceedings related to a London-seated arbitral award in Lahore, Pakistan.

The court clarified that while the New York Convention governs the recognition and enforcement of foreign arbitral awards, it does not permit a party to bring pre-emptive challenges to a London-seated arbitral award in foreign jurisdictions. The English courts maintain exclusive supervisory jurisdiction over such challenges under the Act, with the New York Convention operating only as a shield in recognition and enforcement proceedings in other jurisdictions.

This judgment underscores the English courts' emphasis on respecting parties' choice of arbitral seats and preserving the curial court's role in regulating challenges to awards made under its supervision. The case is set to be considered by the Supreme Court in 2026. For more information, see our blog post here.

Sovereign immunity and arbitration

The intersection of arbitration and sovereign immunity under the UK State Immunity Act 1978 (SIA 1978) continues to generate significant case law:

• In General Dynamics v Libya [2025] EWCA Civ 134, the Court of Appeal considered whether Libya had waived immunity from execution under section 13(3) SIA 1978. Clause 32 of the contract provided for ICC arbitration and stated that any award would be "final, binding and wholly enforceable". The court held that Libya had waived its execution immunity, though the judges differed on reasoning. For further discussion of this case, see our podcast.
• In Hulley Enterprises v Russia [2025] EWCA Civ, the Court of Appeal held that a foreign court judgment can give rise to an issue estoppel conclusively precluding a state from re-litigating whether an exception to state immunity under the SIA 1978 applies. In this case, the courts of the Netherlands (the seat of arbitration) had decided that Russia had agreed in writing to submit the dispute to arbitration. The English courts were therefore entitled to treat that decision as giving rise to an issue estoppel. The court stressed caution in recognising foreign judgments but confirmed that procedural principles like estoppel operate alongside the SIA 1978 framework. However, the court also warned that caution is necessary in deciding whether a foreign court judgment has given rise to an issue estoppel, as it may be unclear precisely what the foreign court has decided or what the effect of its decision is. For more information see our blog post.
• In CC/Devas v Republic of India [2025] EWHC Comm, the English Commercial Court considered whether India's ratification of the New York Convention amounted to a waiver of state immunity under section 2(2) SIA 1978. The court held that ratification of the New York Convention does not, in itself, constitute consent by "prior written agreement" to the English court's adjudicative jurisdiction. The court reaffirmed that any waiver of state immunity by treaty or convention must be express and unequivocal. This case is set to be considered by the Court of Appeal in March 2026 on the basis that it has implications for English law on state immunity beyond this dispute. The Court of Appeal judgment in Infrastructure Services Luxembourg SARL and another v Kingdom of Spain [2024] EWCA Civ is also of note given its determination that foreign states cannot rely on state immunity to oppose registration of adverse arbitration awards issued under the ICSID Convention. The decision was appealed to the Supreme Court which heard the case in early December. We now await its judgment. For more information see our blogposts here and here.
• See here for another case in which the English court grappled with the issue of sovereign immunity and found that a lender's claim against a sovereign state and central bank was not barred on sovereign immunity grounds.

Banking litigation

A Supreme Court ruling on motor finance could impact broker commission claims in other sectors while financial services firms continue to face disputes relating to sanctions, securities and payment processing

Broker commission claims

Over the summer, the Supreme Court delivered a decision that marks a defining moment for broker commission disputes (see here). The Supreme Court held that dealer brokers in motor finance transactions do not owe fiduciary duties to their customers, overturning the Court of Appeal's earlier finding to the contrary. As a result, the court dismissed all claims against the lenders based on common law bribery and accessory liability. However, in one of the appeals, the Supreme Court found that the relationship between the consumer and their lender was unfair under section 140A of the Consumer Credit Act 1974 (CCA) and ordered the lender to pay the commission amount to the customer with interest. The judgment confirms that future broker commission claims are likely to be confined to the statutory route and provides helpful guidance on the factors relevant to unfairness. Our special edition podcast explores the practical implications of this decision and its wider impact on the industry (see here).

In parallel, the Financial Conduct Authority (FCA) has consulted on a proposed industry-wide redress scheme for motor finance customers and intends to launch the scheme in early 2026. The scheme will cover regulated motor finance agreements that lenders entered into between 6 April 2007 and 1 November 2024, where the lender paid commission to the broker. Our FSR colleagues have released a podcast discussing the scope of the scheme, what firms should be thinking about and what this means for the FCA's approach to redress more generally (see here).

In the past year, the courts have scrutinised other key aspects of claims based on breach of fiduciary duty. The Supreme Court confirmed that fiduciaries must account for profits they make from their position, even if they would have earned those profits without breaching their duty (see here). Meanwhile, the Court of Appeal confirmed that dishonesty is an essential element in any claim based on accessory liability for a broker's breach of fiduciary duty (see here). Fiduciary obligations is a complex area of the law and this appellate-level clarification is helpful for future claims.

The litigation landscape for broker commission cases continues to be shaped by procedural developments. The County Court confirmed that 5,800 motor finance claimants could use omnibus claim forms and did not need to issue separate claim forms (see here). In a separate decision, the County Court reviewed the limitation period for unfair relationship claims under s.140A CCA, highlighting that even if the limitation period in respect of a breach of fiduciary duty claim has expired, there may be a risk that the limitation period for an unfair relationship claim has not (particularly where the credit relationship is ongoing, has been assigned or has recently ended) (see here). These decisions could increase the volume of future broker commission claims.

Impact of sanctions

Sanctions litigation continues to test the boundaries of contractual enforcement and jurisdictional strategy. During the summer, the High Court found in favour of several banks, ruling that Russian sanctions prohibited payment under on-demand bonds (see here). In its analysis, the court examined several complex issues, including what amounts to illegality in the place of performance, so that a contract will be prevented from being performed under the so-called Ralli Bros principle. The judgment also considers the role of national competent authorities and their determinations. Ultimately, the decision confirms that parties must comply with sanctions, even where contractual obligations exist.

The courts have also addressed the procedural consequences of sanctions. The High Court declined to vary an interim payment order (see here) and refused to set aside a statutory demand issued by a "designated person" (see here), reaffirming that sanctions do not automatically frustrate enforcement rights or encourage non-compliance with court orders. In parallel, both the Court of Appeal and the High Court granted banks' requests to revoke final anti-suit injunctions to avoid Russian court-imposed penalties, while preserving declarations on jurisdiction (see here and here). These decisions reflect a pragmatic judicial approach, as the courts balance the need to uphold English jurisdiction with the realities of international enforcement risk under sanctions regimes.

Authorised Push Payment (APP) fraud

The courts continue to refine the scope of duties owed by payment service providers (PSPs) to their customers when processing payments. The boundaries of these duties have been tested by claims brought by APP fraud victims, particularly since the Supreme Court's decision in Philipp v Barclays Bank UK plc [2023] UKSC 25 (see here), which effectively barred so-called Quincecare claims.

In the spring, the High Court considered the novel "retrieval" duty, requiring banks to take adequate steps after being alerted to a fraud to recover payments made (first recognised in Philipp). The court ruled that receiving PSPs do not owe a retrieval duty to non-customers, and rejected attempts to expand the so-called Quincecare duty to situations where no contractual relationship exists between a bank and the third-party victim (see here). However, the court accepted that the retrieval duty is a further potential application of the general duty of care owed by a sending bank to interpret, ascertain and act in accordance with its customer's instructions. This was reconfirmed in a subsequent High Court decision, finding that the retrieval duty was arguable in a claim by a customer against its sending bank (see here). It would be helpful for the financial services industry to see this point tested in a substantive trial judgment, as so far it has only considered to the strike-out standard.

In another notable development, the High Court permitted APP fraud victims to pursue a "derivative" Quincecare claim against a PSP, bringing the action in place of the PSP's corporate customer, which was the vehicle used for the fraud (see here). Separately, the High Court allowed a potential claimant to use documents obtained via a Norwich Pharmacal Order in proceedings against the disclosing bank, to evidence its conduct as a receiving bank in an APP fraud case (see here). These decisions signal that claimants continue to bring novel APP fraud claims against both sending and receiving banks, notwithstanding the UK's mandatory APP fraud reimbursement scheme which came into force on 7 October 2024.

Class actions against banks

The courts continue to scrutinise the procedural mechanisms used by claimants to bring collective claims against financial institutions. The Court of Appeal rejected an attempt to use CPR 19.8 representative proceedings for a securities class action, and confirmed that the courts will not allow this procedure to be used to gain tactical advantages (see here). The decision underlines that the court will exercise discretion when deciding whether to allow a representative action to proceed.

The court also reopened the key question of whether "passive" investors can meet the reliance requirement for a s.90A Financial Services and Markets Act 2000 (FSMA) claim based on alleged omissions or misstatements, and the requirements for a claim of dishonest delay. Last year, the High Court considered this question for the first time, ultimately dismissing claims brought by 241 funds who had not read or considered the published information alleged to contain misstatements or omissions when deciding to buy, hold or sell shares in the relevant issuer (see here). However, in a separate case this year, the High Court declined to restrict "passive" investors from bringing claims under section 90A (see here). The court preferred to defer decisions on the meaning of reliance and delay until trial, and accordingly declined to strike out the "passive" investor claims.

The courts also confirmed that shareholders generally have no entitlement to the production of a company's privileged material. The Privy Council abrogated the so-called "shareholder rule" – ie that a company cannot assert privilege against its shareholders save in relation to documents created for litigation against that shareholder – and confirmed that it forms no part of English law (see here). The Privy Council highlighted that the continued recognition of the shareholder principle would discourage directors from taking legal advice needed to make decisions for the benefit of the company, due to the risk of having to disclose that advice to shareholders later.

Finally, regulatory changes on the horizon may impact securities litigation. The FCA aims to attract and retain more listed companies in London and, as part of this drive, has published new UK prospectus rules that involve significant changes. The new rules include when companies need a prospectus for a secondary capital raising, and make it easier for companies to make forward-looking statements (see here). The new rules will come into force in January 2026. It is anticipated that the new rules will likely lead to fewer prospectuses being published, at least for secondary capital raises. While this may reduce the risk of s.90 FSMA claims, the change could magnify the importance of the information which is disclosed by issuers, driving claims under s.90A FSMA and common law claims. You can read more in our article published in Butterworths Journal of International Banking and Financial Law here.

Civil Fraud

Judgments from the UK's highest courts have clarified the law on fiduciary duties and the tort of deceit

Supreme Court clarifies scope of liability for directors and fiduciaries

The Supreme Court issued a number of judgments this year concerning liability for breach of fiduciary and/or directors' duties. Three are of particular note.

In the first case, the Supreme Court confirmed that a fiduciary, including a company director, is liable to account for all profits made out of their position as such. They cannot circumvent liability by arguing that "but for" the breach they would have made the profits in any event – for example because, if asked, the principal would have consented. The court may, however, award an equitable allowance to reduce the amount of accountable profits where the fiduciary has devoted hard work and skill, and potentially put their own capital at risk in obtaining such profits.

In so deciding, the Supreme Court unanimously declined to change the law governing a fiduciary's liability to account for profits. The decision confirms the strictness with which the equitable principles that attach to a fiduciary relationship are to be applied. The "no profit" rule requires a fiduciary who makes a profit out of their position (such as by exploiting a business opportunity they became aware of by virtue of being a fiduciary) to account for that profit unless the principal provides informed consent to the fiduciary keeping it. It is closely linked to the "no conflict rule", which prohibits fiduciaries from placing themselves in a position where their interest and duty may conflict. The essential purpose of both rules is to deter individuals who have undertaken an obligation of undivided loyalty to someone else from being tempted to fall short of that obligation for their own gain.

In the second case, the Supreme Court restored an order requiring a third party who dishonestly assisted a company director in making and then dissipating an unauthorised profit to pay equitable compensation equal to the amount of that unauthorised profit. In so doing, the Supreme Court confirmed that, in cases involving multiple breaches of duty, such as the making of unauthorised profits and the subsequent dissipation of those profits, the two breaches must be viewed as separate and distinct.

A dishonest assistant can therefore be liable, jointly with the defaulting fiduciary, for losses caused by the dissipation. In the Supreme Court's view, this does not contradict the established principle that a dishonest assistant can only be liable to account for profits they have themselves made (and not those made by the defaulting fiduciary). It is irrelevant that the compensation awarded against the dishonest assistant may be equal to the profit gained by the defaulting fiduciary.

In the final case, the Supreme Court clarified that anyone who assumes fiduciary powers can be held liable for breach of those duties, even without having formal authority. This liability extends to those who intermeddle with company assets, regardless of whether the wrongdoer personally receives the misappropriated property or channels it to another entity under their control.

The decision also confirms that equitable compensation aims to restore the value of misappropriated property, and that the date for valuing loss is not fixed by rigid rules. Instead, the courts will consider what is just and equitable in the circumstances, with regard to the substance and purpose of transactions. The Supreme Court further clarified that if a defaulting fiduciary is involved in, orchestrates, or benefits from subsequent events that destroy the value of the misappropriated property, they cannot rely on those events to avoid or reduce their liability for the original breach unless they can provide an innocent explanation.

Conscious awareness of representation is not a requirement for the tort of deceit

The Board of the Privy Council held that, for a claim in the tort of deceit, there is no legal requirement for a claimant to show that it was consciously aware of representations made by the defendant or understood them to have been made. The decision clarifies that claimants may be able to prove reliance on a representation where they have acted on an unconscious assumption. However, claimants will need to prove that: (i) the assumption was reasonable; and (ii) there was a causal link between the defendant's words or actions and the claimant's assumption.

As an opinion of the Privy Council this decision is not binding on the English courts. However, the judgment specifies that this represents the law of England and Wales as well as Bermuda, and it is likely to be persuasive in future cases before the English courts, given that the members of the Board of the Privy Council also sit in the Supreme Court.

Class actions

Class actions continue to dominate the litigation landscape while a review of opt-out competition collective actions is underway

High-profile group actions progressing through the courts

Group actions have continued to be a prominent feature of the litigation landscape, with a significant proportion of the major commercial cases in the English courts now being pursued on a collective basis – whether with or without a group litigation order (GLO).

One of the largest cases currently progressing through the courts is the diesel emissions litigation, in which claims by around a million and a half claimants are being litigated under 13 separate GLOs, all collectively managed under the umbrella of the Pan NOx Emissions Group Litigation. There are also significant claims being pursued against major international corporations relating, for example, to allegedly false or misleading statements to the market, defective products, or environmental damage in foreign jurisdictions.

Continued uncertainty on potential for opt-out representative actions

This year saw various decisions refusing permission for claims to be brought under the CPR 19.8 representative action procedure, which allows a claim to be brought on behalf of those who have the "same interest" in it. These included claims for misuse of private information (Data class actions: Court of Appeal upholds decision blocking "opt-out" representative action for misuse of private information) and copyright infringement (High Court refuses to allow representative action to be brought on behalf of copyright owners in IP case).

To date, however, there has not been a case looking at the key questions of whether, under CPR 19.8, compensation can be awarded on a collective basis and amounts deducted to pay claimant law firms and funders – which would have a significant impact on the commercial viability of representative actions for claimants and funders. Those questions were due to be considered at a preliminary issues hearing in January 2025, in a case relating to secret commissions, but the case settled late last year: Representative actions under CPR 19.8: Settlement means key questions on funding and damages will have to wait.

English courts accept jurisdiction in transnational tort claims

Two cases over the past year have demonstrated that, while the English court has a discretion to decline jurisdiction over UK-based defendants on the basis that another forum is more appropriate (in contrast to the pre-Brexit position, when there was no such discretion), it will not exercise that discretion if the claimants establish a real risk that they would not obtain substantial justice in the alternative forum:

• The Court of Appeal rejected a jurisdiction challenge in relation to claims brought by migrant workers against English and Malaysian companies in the Dyson group regarding alleged abusive employment practices by one of Dyson's suppliers in Malaysia. The fact that there was a serious risk that the claimants would be unable to fund their claims in Malaysia, together with various factors connecting the dispute to England, meant that England was clearly the appropriate forum: Supply chain risk: Court of Appeal finds claims against Dyson relating to actions of Malaysian manufacturer should proceed in England.
• The High Court rejected a jurisdiction challenge by two UK-domiciled companies in relation to alleged damage as a result of pollution from a mine operated by their Brazilian subsidiary. The court held that, while Brazil had a closer connection to the case, there was a real risk that the claimants would not obtain substantial justice there due to funding difficulties: High Court allows case to proceed against defendant companies domiciled in England despite claims having more real and substantial connection with Brazil.

Significant decisions in collective proceedings in the Competition Appeal Tribunal

There have been some significant decisions under the collective proceedings order regime in the Competition Appeal Tribunal (CAT). In December last year, in the first opt-out collective competition claim to proceed to trial, the CAT unanimously dismissed a claim for over £1bn in damages on behalf of over 3.7 million BT customers, having concluded that there was no abuse of dominance: Competition class actions: First case to go to trial ends in failure. Permission to appeal was refused. Two other cases have since gone to trial and received a judgment on the merits. The first, against train operators relating to boundary fares, was dismissed. However, the second delivered the first substantive success for claimants under the regime, with the CAT awarding some £1.5 billion in damages to a class of some 36 million users of Apple devices.

Opt-out competition class actions under the spotlight

The Department for Business and Trade issued a call for evidence on the operation and impact of the opt-out collective actions regime in the Competition Appeal Tribunal, a decade on from its introduction. It asked a broad range of questions on issues such as access to the regime and how cases are funded, the scope of the regime and the threshold for certification, the use of ADR and how damages should be distributed. The consultation was open until mid-October and the government's response is awaited.

Separately, the Supreme Court is due to rule on whether the Court of Appeal was wrong to find that claims relating to foreign exchange spot trading should proceed on an opt-out basis, overturning the decision of the Competition Appeal Tribunal.

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