In a judgment handed down on 9 March 2018, Barclays became the first bank to have a scheme approved for separating and ringfencing its domestic deposit taking business from its other business, including its investment bank business.
The requirement to ringfence certain aspects of its business arose from legislative reforms enacted in response to the 2008-2009 financial crisis, with a view to strengthening UK banks and providing additional protection to their retail and small business customers.
In his detailed judgment, Vos J addressed the applicable legal principles upon which the court should act when considering whether or not to sanction a ringfencing scheme. In applying those legal principles, the Judge placed considerable reliance upon the opinion of the Skilled Person (Mark Byers of Grant Thornton, represented by Javan Herberg QC and Simon Pritchard) as to the statutory question of (1) whether persons other than Barclays were likely to be adversely affected by the scheme, and (2) if so, whether the adverse effect was likely to be greater than is reasonably necessary in order to achieve whichever of the specific statutory purposes are relevant.
The judgment also considered the impact of the Scheme on Barclays pensioners and others claiming to be adversely affected, and upheld the conclusions of the Skilled Person in each respect.
Click here for the judgment.