Limited scope for Judicial Review of a regulator's disciplinary proceedings

Courts back FCA's investigative and enforcement action and signal an unwillingness to allow those prosecuted by the FCA to go outside the statutory process to challenge the FCA's decision making.

25 June 2013

The Financial Conduct Authority's (FCA) Regulatory Decisions Committee (RDC) can fine individuals and companies for disciplinary breaches of banking regulations. The FCA (formerly FSA) instigated disciplinary proceedings against the former group finance director of Bradford & Bingley, Mr Willford, personally for failing to consider relevant financial information in connection with a largely unsuccessful rights issue. Those proceedings culminated in the RDC issuing a Decision Notice and imposing a £100,000 penalty.

Mr Willford wanted to challenge this decision. Although he had a right of statutory appeal under FSMA 2000 to the Upper Tribunal he argued that he had no way of knowing if he should or should not refer the Decision Notice to the Tribunal as no proper reasons had been given for it by the FCA. Instead he sought Judicial Review of the decision to issue the notice.

In its recent judgment, the Court of Appeal has now refused the application for judicial review on the basis that, save in exceptional circumstances, an alternative statutory appeal procedure precludes an application for judicial review. This is particularly true where the statute has a wider purpose of protecting the public interest.

This decision echoes the recent case in the High Court in Northern Ireland in which our own Burges Salmon team acted, where the Court refused to allow the former directors / shareholders of Desmonds & Sons to seek judicial review of regulatory proceedings brought by the Pensions Regulator.

In the post-recession world of ever increasing financial regulation, these two cases show how unwilling the Court is becoming to permit the subjects of disciplinary proceedings to evade penalty for minor public law failings by regulators. If an appeal route exists individuals are expected to make use of it and not try to avoid the process by seeking Judicial Review.

The courts have implicitly backed the FCA's investigative and enforcement action and signalled an unwillingness to allow those prosecuted by the FCA to go outside the statutory process to challenge the FCA's decision making.

In addition the Courts continue to signal an intention to keep (or perhaps narrow) the scope of Judicial Review to limited circumstances. Recent changes to the Court rules have made Judicial Review applications more difficult in procurement and planning and judges continue to refuse large numbers of applications for permission to continue Judicial Review proceedings. Regulatory defendants will need to expect to appear in Tribunals to argue their cases where that route is available to them.

Brian Wong and Matthew Walker regularly advise Judicial Review issues.

Key contact

Brian Wong

Brian Wong Director

  • Rail
  • Highways and Road Transport
  • Judicial Review and Public Law

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