| Good morning. Several of the UK’s biggest car loan providers have called on senior judges to block mass lawsuits for alleged mis-selling, in a case that will help determine whether motorists can secure compensation outside the financial regulator’s £9.1bn redress scheme. Eight lenders including Black Horse, an arm of Lloyds Banking Group, urged the Court of Appeal on Wednesday to stop lawyers bringing so-called omnibus claims on behalf of thousands of motorists. It’s the latest leg of the multibillion-pound motor finance scandal, which stems from commissions lenders paid dealerships when car buyers took out loans.
At first glance, this is a dry procedural dispute to determine if motorists can be named on just eight “omnibus” claim forms. But much is at stake, both for banks and claimant law firms, for whom the mass claims are a way to transform low-value grievances into multimillion-pound litigation with the potential for lucrative fees.
The High Court last year gave the green light to “omnibus” legal claims against eight lenders, including the financing arms of Volkswagen, BMW and Stellantis, brought on behalf of motorists by law firm Barings. But the lenders on Wednesday called on a panel of three Court of Appeal judges, Lord Justice Coulson, Lord Justice Stuart-Smith and Lord Justice Cobb, to overturn the decision.
The banks see a cash grab by claimant lawyers: the Financial Conduct Authority is setting up an industry-wide redress scheme, which it expects to cover 12.1mn car loans with an average payout of £829 each. They have called on the Court of Appeal to rule that motorists who wanted to must take action individually in the County Court.
But the claimants say clubbing together is crucial for motorists to secure access to justice, arguing they can secure higher awards by launching mass claims against lenders through the courts than the FCA is offering through its redress scheme.
They say issuing the claims individually would force claimants into the “small claims track”, preventing them recovering legal costs and meaning many would be unlikely to be pursued.
Sullivan & Cromwell admits to AI ‘hallucinations’: The law firm told a US federal bankruptcy court that a major filing it made in a high-profile case contained multiple “hallucinations” made by AI software. Andrew Dietderich, the head of S&C’s restructuring practice, apologised in a letter to New York federal judge Martin Glenn for mistakes that included misquoting the US bankruptcy code and citing cases incorrectly. Dietderich said the firm’s policies on the use of AI had not been followed when the document was prepared, and it was considering whether it needed to make “further enhancements” to its internal training and review processes.
A Full Disclosure reader asks: My boss reprimanded me for using too many exclamation marks in emails with clients, saying it was unprofessional. I feel a bit hurt by this, as I want to be friendly to build a relationship with clients. Is she being unreasonable, or am I reading too much into things? “Confession time. I am a natural exclaimer in emails. Such is my concern about looking unfriendly that I end up spraying them around liberally, before having to go back through said emails to perform a cross check. I’d advise you to do the same before pressing send. When you do, you may realise that you sound not so much friendly but more like someone who has just downed seven double espressos. In the earlier stages of your career, it may be no bad thing to err on the side of formality — at least while you’re getting used to the clients and their preferences. That said, do consider how you feel about your boss’s correspondence and their rapport with clients. Attunement to clients is not the exclusive preserve of bosses. So it’s possible that you may be more in tune with your client’s communication style than the partner. In which case, don’t take the advice to heart.” — Annmarie Carvalho, founder of TCC, a legal therapy, training and coaching consultancy and author of Staying Sane in Family Law Got a question for our experts? Please get in touch at fulldisclosure@ft.com. Morrison Foerster hired Diane Hazel as a partner in the firm’s antitrust law group in Denver from Foley & Lardner. Anna Orlander has returned to Baker McKenzie as a partner in its M&A practice in Stockholm. She was previously in-house at gaming company Embracer Group. Haynes Boone hired Sudan I Maccio in Houston as a partner in the energy, power and natural resources group. He was previously chief legal counsel at energy company PetroTal Corp. Litigation and intellectual property partner Aimee Fagan joined Winston & Strawn in Dallas, from Sidley Austin. Gibson Dunn hired a four-partner team of appellate litigators from Sullivan & Cromwell. Former acting solicitor-general Jeff Wall will be joined by Morgan Ratner and Judson (Judd) Littleton in Washington, DC, and Yaira Dubin in New York.
 | |  | Ex-Swedbank chief cleared of conviction in money-laundering scandal | | Birgitte Bonnesen had faced 15-month prison sentence for ‘gross swindling’ | |  | Refinitiv to delete profiles of politicians’ grandchildren after lawsuit | | Minors sued data provider owned by London Stock Exchange Group over listing of relatives of ‘politically exposed persons’ | | | | | This column is by a former banker but I’m sure readers of this newsletter can recognise the habit. Craig Coben, a former global head of equity capital markets at Bank of America, says investment bankers are so conditioned to be highly responsive that even in retirement they try to be immediately available, despite having no clients or deadlines. Is the need to reply instantly to trivial messages and to obsessively monitor the markets the white-collar equivalent of social media addiction? As Craig puts it: We may not like the comparison to teenagers glued to their phones and tablets, but the phenomenon is similar. From the outside, it looks like compulsive scrolling; to us, it still passes as diligence — or at least staying ‘well-informed’. |
