Re IBP Markets: expert evidence refused in CASS title transfer collateral test case

The High Court has refused permission for expert evidence in Re IBP Markets Ltd (in special administration) [2026] EWHC 1790 (Ch), holding that an expert must offer a market practice based explanation rather than simply contradict conclusions said to follow from admitted facts. Mr Justice Hildyard gave the judgement following the first contested directions hearing.

The dispute is described by the respondent as something of a test case in the IBP special administration and the wider market. IBP, a wholesale broker regulated by the Financial Conduct Authority, entered special administration in October 2023, triggering a primary pooling event under CASS 7A.2.2R. The client money pool is expected to be £30.1m. All Blue Investments North Star 1 Limited, now in liquidation, has claimed £21.2m of that pool. The joint special administrators say the assets and funds were held under a title transfer collateral arrangement pursuant to IBP's terms of business, which under CASS 7.11.1R(4) and CASS 6.1.6R(4) would exclude them from client money and safe custody protection for a non-retail client and leave All Blue an unsecured creditor.

The economics are stark. If the disputed clients are held to be TTCA clients, their return is nil and undisputed clients recover 56 per cent. If not, both groups recover 38 per cent. Other disputed clients include All Blue Falcon FZE, Farmco Holdings, Red Rowan Investments and Worldwide Instruments. The court noted that the operation of CASS and TTCAs is of systemic importance to the financial market yet has been litigated infrequently, leaving limited authority on the interpretation of terms alleged to be TTCAs.

Two issues are listed for a three day trial from January 2027: the construction of the terms of business, and their application to the transactions actually entered into. The administrators have served a Trading Report comparing All Blue's adjusted cash against its market exposure, which they say shows that for almost all of the period from February to mid-August 2023 exposure substantially exceeded cash, indicating leveraged trading consistent only with collateral posted under a TTCA.

All Blue characterised the report as essentially a vehicle for expert evidence without permission or the safeguards of Part 35, and sought permission for both sides to adduce evidence on CASS compliance and market practice and on the analysis of trading data. It relied on Crema v Cenkos Securities for the admissibility of market practice evidence as relevant background to construction.

Hildyard J found the point in issue narrow. The comparison of two figures does not require expertise, and the JSAs had expressed no opinion on market value. What might have justified permission was expert evidence pointing to a market practice offering an alternative explanation for the imbalance. Pressed three times on whether the proposed expert, Mr Colin Bugler, would offer standard market reasons why a trader might post funds in that pattern, counsel felt unable to go that far. The judge concluded the application lacked sufficient cogency: an expert deployed without reference to any established market practice, to lend apparent weight to a contrary conclusion, would risk usurping the function of the court. He distinguished American Airlines v Hope, observing that the CASS rules need no market expert to explain them.

Unusually, he left the door open. A further application will be entertained if accompanied by a draft report showing what the expert would actually say, served by 15 September 2026 and at All Blue's risk as to costs, provided the trial window is preserved.

On disclosure, the judge accepted the administrators' proviso that requests for complete email chains be accompanied by an explanation of why the chain is or may be relevant.