Financial Markets Disputes View: January 2026

What's coming up

Join us on 30 January for immediate insights on the Supreme Court hearing in BlueCrest v HMRC on salaried member rules and its impact on LLPs and asset managers.

AI x Dispute Resolution Webinar Series 2026 - we are launching a global initiative designed to provide practical and up-to-date insights into the fast-evolving world of AI disputes. The series brings together leading lawyers and external experts to deliver practical insights on AI related civil claims and regulatory investigations for in house counsel and business leaders across all sectors. The series will run from February to May and August to December 2026. Register here.

FCA Enforcement Watch 1: Key Themes and Insights

The FCA has published the first edition of its new Enforcement Watch newsletter providing insights and themes from its enforcement work. The first edition looks at the regulator's updated publicity policy in action, recent enforcement case priorities and international collaboration efforts. Read more here.

What's in store for ESG litigation in UK and EU

2025 was a tumultuous year for sustainability and environmental litigation. Against a challenging political backdrop, as countries and organisations reassessed their climate and environmental commitments, claimants and regulators sought to hold organisations to account as the adverse effects of climate change continued to be felt across the globe. As we enter 2026, the struggle for dominance between the pro- and anti-sustainability movements will no doubt persist. However, we should avoid taking too much comfort from the slowdown in the political impetus to prioritise sustainability and environmental policies. This article reviews last year's key developments, trend drivers, and what organisations should expect as they look ahead to 2026.

Whistleblowing incentives

Several recent developments have helped to keep the focus on whistleblowing and, in particular incentives for whistleblowers. The UK government's Anti-Corruption Strategy sets out wide ranging ambitions. As part of its work over the next 5 years to meet these ambitions, the government intends to consider the incentivisation of whistleblowers in economic crimes.  In particular, it will "assess the feasibility of introducing financial incentive schemes and support for individuals reporting economic crime." The Strategy followed hot on the heels of the Strengthened Reward Scheme which is for individuals who report serious tax avoidance or evasion and which could result in a financial reward for the whistleblower if the information provided helps collect at least £1.5 million in tax. The reward could be between 15% and 30% of the tax collected. HMRC already had some discretion to reward whistleblowers but this formalisation of the arrangement is significant. Along with the commitment contained in the Anti-Corruption Strategy, it may strengthen the hands of other agencies such as the SFO looking to establish similar arrangements.

HM Treasury's annual AML report

HM Treasury published its annual report for the financial year 2024 to 2025 on anti-money laundering and counter-terrorist financing supervision at the end of last year against the backdrop of significant structural reform in the AML landscape. Following the 2023 consultation on the AML/CTF regime, the government has decided that the FCA will become the single AML/CTF supervisor for professional services firms (legal services, accountancy service providers, and trust and company service providers). The legislation to implement this change is expected shortly. The annual report itself follows the tried and tested format of earlier reports but contains an interesting shift of emphasis towards evaluating supervisory effectiveness rather than just measuring activity. In order to help evaluate effectiveness, HMT has expanded and refined the metrics it requests from supervisors and notes that they were designed with FATF methodology in mind to include data that will be required as part of the UK's next Mutual Evaluation Report.

FCA Enforcement

Nationwide has been fined £44 million by the FCA for having inadequate financial crime controls between October 2016 and July 2021. As a result, it could not keep up to date due diligence and risk assessments for its personal account customers. It was also unable to monitor and manage money laundering risks and did not have an accurate picture of those presenting a higher risk of financial crime. The regulator noted that Nationwide took too long to address its flawed systems and weak controls meaning red flags were missed. This was the 7th Financial Crime Final Notice in 2025, which sets a new record for the FCA, although 2021 retains its title as the year of the highest total fines.

The FCA has published final notices imposing financial penalties of £232,800 and £138,900 respectively on two former financial directors of Carillion plc for breaches of Article 15 of MAR (prohibition of market manipulation), Listing Rule 1.3.3R (misleading information not to be published), Listing Principle 1 (procedures systems and controls) and Premium Listing Principle 2 (acting with integrity). The FCA found that Richard Adam and Zafar Khan were both aware of "serious financial troubles" in Carillion's UK construction business but had failed to reflect this in the company's announcements or to alert the board, leading to poor oversight. Both had acted recklessly and were knowingly concerned in breaches by the company of the Market Abuse Regulations and the Listing Rules.

The FCA is investigating WH Smith's compliance with listing and disclosure obligations, after the company uncovered an accounting issue at its US subsidiary. The company announced the FCA investigation in a market filing on 19 December.

In R (on the application of Claims Protection Agency Ltd) v Financial Conduct Authority (No 2) [2025] EWHC 2615 (Admin), the High Court gave the second part of its judgment dismissing a judicial review claim that challenged the FCA's decision to publicly name a firm as the subject of an investigation. This part covered various issues which could not be made public when the initial judgment was given back in October last year including the naming of the firm itself, a claims management company, and confirmation that the investigation relates to the firm's promotion and handling of motor finance claims. In particular, the FCA was concerned about suggestions made in a marketing campaign that motor finance claimants could receive considerably higher levels of redress than the likely amounts announced by the FCA (£4-5k v the FCA's £950). What remains of most interest was sight of the FCA's detailed reasoning to reach a decision to publish, in particular enabling customers, who had been signed up following a "well funded a high profile marketing campaign ... including prime time TV, social media and adverts on public transport", to decide if (in light of lower likely compensation) they no longer wished to proceed.

Round up of Cases

Cases catching our eye this month included the Supreme Court's decision on class action classification.  In Evans v Barclays Bank & ors [2025] UKSC 48, the Supreme Court reinstated a decision of the CAT to certify a class action relating to FX spot trading on an opt-in basis rather than opt-out, due in part to its assessment of the strength of the claim, which it considered to be weak. The Court of Appeal had taken a more positive view of the prospects of the claim but also criticised the CAT for treating its provisional view on the merits as final, knowing the opt-in designation was likely to end the claim. The Supreme Court allowed the appeal from that decision, holding that the strength of the claim was a relevant consideration for the CAT, as opt-out proceedings place additional burdens on defendants. The CAT has wide case management powers and a broad discretion to decide whether proceedings were appropriate to be brought on an opt-in or opt-out basis.

On the true construction of the terms of engagement, a financial adviser was entitled to recover unpaid remuneration for merger advice he had given. Despite clumsy and "rather workmanlike" drafting in some respects, there was no real ambiguity. Although the originally contemplated transaction had not proceeded, an alternative merger transaction had been completed instead. That transaction constituted an "equivalent transaction" within the meaning of the adviser's terms of engagement: it had a substantially similar economic effect as the originally contemplated transaction and was entered into during the engagement period. Strand Hanson Ltd v Conduit Pharmaceuticals Ltd [2025] EWHC 3287 (Ch)

In My Protection Guru Ltd v Lifesearch Partners Ltd [2026] EWHC 60 (Comm), a written contract for the supply of insurance intermediary services was found to have been varied by subsequent oral agreements relating to specific commission arrangements, despite the fact that it contained an entire agreement clause and a No Oral Modification (NOM) clause. The written contract failed to reflect the parties' actual commercial arrangements, and the parties had for several years conducted themselves on the basis that these oral terms were contractually binding.

SFO can enforce Deferred Prosecution Agreement after expiry date

The High Court has held that the SFO can apply to the court to deal with a breach of a DPA after the date upon which it was stated to come to an end. Read more here.

Collective Proceedings in the CAT: 2025 in Review

2025 saw a number of developments in collective proceedings in the Competition Appeals Tribunal from a failed appeal to the first class representative win and a funder dispute. With more cases due to reach trial in 2026 and the legislative reform of litigation funding on the agenda, the pace of developments in collective proceedings is set to continue. Read our article for further analysis. To keep track of all proceedings, and key developments keep an eye on our Collective Proceedings Tracker available here. 

Jurisdiction - asymmetric clauses

In Investec Bank Plc v Pavlo Protopap, the English court had to consider whether to decline jurisdiction, where an asymmetric jurisdiction clause was used. Read more.

The Insurance Act 2015 - An insured's duty of fair presentation

Ensuring that an adequate disclosure is made to insurers whilst placing insurance is vital. Following several decisions in 2025, we look at the court's approach to the pre-contractual duty of fair presentation under the Insurance Act 2015. Read more here

In case you missed it

Enforcement of AI issues under data privacy law - this webinar reviewed how AI had been enforced under data privacy law to date, where future enforcement was likely to focus, and the interplay of enforcement under the EU AI Act and other digital regulation. Watch on demand.

Contract Masterclass Webinar Series - enhance your understanding of English contract law with concise 30-minute sessions. Covering recent legal developments, drafting tips, and dispute risks, these webinars are designed to keep you ahead. Watch on demand here.

Privilege & AI: Pitfalls and Tips for Legal Protection - as generative AI tools are increasingly used in the context of legal advice, important questions arise around the availability of legal privilege. View our webinar on demand.