West, R (on the application of) v Lloyd's Of London

A body with commercial objectives does not become a public authority merely because it is created by private statute, regulates its members, or is subject to public supervision. The relevant inquiry examines the nature of the impugned act and its legal consequences. Decisions under the Major Syndicate Transactions Byelaw concerning members’ contractual participation in Lloyd’s syndicates were private. The Financial Services Authority, not Lloyd’s, exercised governmental regulatory functions in the relevant market. The same analysis meant that Lloyd’s was not a public authority under the Human Rights Act 1998, section 6, for those acts. Judicial review was therefore unavailable.

Dr Julian West sought judicial review of four Business Conduct Committee decisions approving minority buy-outs of his, or potential, participation in Lloyd’s syndicates. Keith J refused permission on 6 May 2003, holding that Lloyd’s was not a public authority and that the decisions did not involve public functions. On 3 October 2003, the Court of Appeal granted permission and directed that Lloyd’s amenability to judicial review, including under section 6 of the Human Rights Act 1998, be determined first. The central issue was whether the impugned decisions were governmental public-law acts or private decisions arising from contractual arrangements externally regulated by the Financial Services Authority.

Brooke LJ delivered the judgment. Mummery and Dyson LJJ agreed.

1. Private-law character. The impugned approvals concerned the commercial relationship between Dr West and the relevant managing agents. That relationship was governed by contract, and the decisions had consequences in private law. The contractual obligation to comply with Lloyd’s Acts, byelaws and Council directions did not convert the resulting decisions into public acts. The earlier line of authority concerning Lloyd’s, including R v Lloyd’s of London ex p Briggs [1993] 1 Lloyd’s Rep 176, was correctly decided.
2. Statute and external regulation. Lloyd’s incorporation under private legislation was not determinative. The case was materially different from R v Panel on Take-overs and Mergers, ex p Datafin plc [1987] QB 815, where regulatory control operated in a public sphere in the absence of governmental regulation. The Financial Services and Markets Act 2000 established the Financial Services Authority as the statutory regulatory authority for the relevant market, with powers concerning Lloyd’s permissions and directions to Lloyd’s and its members.
3. Human Rights Act. Section 6 of the Human Rights Act 1998 is concerned principally with bodies whose nature is governmental in the broad sense. The public/private assessment is fact-sensitive. Statutory authority, public-body control and the relationship between the functions and public activities may be relevant, but regulatory supervision alone is not decisive. Lloyd’s objectives were wholly commercial and its functions under the Major Syndicate Transactions Byelaw were private. The governmental responsibility in the relevant regulatory sphere lay with the Financial Services Authority.
4. Disposition. The court declared that Lloyd’s was not amenable to judicial review, whether under section 6 of the Human Rights Act 1998 or otherwise. Any private-law claim would belong in the Chancery Division and would require the claimant to reshape his case. Amendment or transfer was impracticable, so a new claim would have to be begun.

• Court of Appeal (Civil Division): [2004] EWCA Civ 506, 27 April 2004. Declared that Lloyd’s was not amenable to judicial review in relation to the functions under scrutiny.
• Court of Appeal (Civil Division): On 3 October 2003, Ward and Latham LJJ granted permission and directed that the amenability question be reserved and tried first.
• High Court: On 6 May 2003, Keith J refused permission to apply for judicial review because Lloyd’s was not a public authority and the impugned decisions did not involve a public function.