IBP Markets investor loses bid for expert evidence in £21.2 million client money dispute

The High Court has refused an application by a former client of IBP Markets Ltd to rely on expert evidence in a £21.2 million dispute over whether assets transferred to the failed broker are protected client money or an unsecured claim. Justice Hildyard held that All Blue Investments North Star 1 Ltd had not shown that expert evidence was reasonably required. The dispute is expected to operate as a test case in IBP’s special administration and could materially affect distributions from a client money pool estimated at £30.1 million.

IBP, a wholesale investment broker, entered special administration in October 2023 following regulatory intervention by the Financial Conduct Authority. David Soden and James Bennett of Teneo were appointed joint special administrators.

All Blue, now in liquidation in the British Virgin Islands, claims that £21.2 million of assets and funds transferred to IBP were held as client money on statutory trust under the FCA’s Client Assets Sourcebook. The administrators contend that the assets were transferred under a title transfer collateral arrangement, or TTCA, which would leave All Blue as an unsecured creditor.

The same issue affects other disputed clients whose combined client money claims total approximately £23.2 million. If the administrators establish that the disputed clients traded under TTCAs, undisputed clients are expected to receive approximately £30.1 million, representing a 56% return. If the disputed clients succeed, both groups would receive an estimated 38%, reducing the amount available to undisputed clients to approximately £20.6 million.

All Blue argued that expert evidence was needed to address the market context surrounding TTCAs and analyse trading data relied on by the administrators. It said the administrators’ Trading Report effectively introduced expert opinion without complying with CPR Part 35.

The administrators said the report was factual. It compared All Blue’s cash position with the value of its open positions, summarised trading statements and identified correspondence indicating leveraged trading. The evidence showed that All Blue’s market exposure substantially exceeded its deposited cash and assets for almost all of the period between February and mid-August 2023.

Justice Hildyard said All Blue had not identified any established market practice offering an alternative explanation for that trading pattern. The proposed evidence appeared to amount only to an expert disagreeing with the administrators’ provisional conclusion, which risked usurping the Court’s role in construing the contract and applying the CASS rules.

The Court left open a renewed application if All Blue can produce a draft expert report identifying a genuine market-based alternative explanation. Any application must be served by 15 September 2026 without disrupting the three-day trial scheduled for January 2027.

Read the full decision here.

• Adam Al-Attar KC and Paul Fradley, both of South Square (instructed by Norton Rose Fulbright) for David Soden and James Bennett of Teneo as joint special administrators

• William Day of 3VB and Imogen Beltrami of South Square (instructed by Freshfields) for All Blue Investments North Star 1 Limited (in liquidation)