R (West) v Lloyd's of London

The Court of Appeal held that the decisions of the Business Conduct Committee of Lloyd's, taken under the Major Syndicate Transactions Byelaw to approve minority buy-outs, were private in nature and not amenable to judicial review. Key legal principles applied were that the contractual relationship between Lloyd's members and managing agents governs disputes over syndicate participation, and that the Financial Services Authority under the Financial Services and Markets Act 2000 is the statutory public regulator for Lloyd's business, so Lloyd's regulatory functions at issue were not governmental. The court considered Human Rights Act 1998 section 6 but concluded Lloyd's was not a "public authority" for the functions in dispute. The court followed earlier authority (notably Briggs and related Administrative Court decisions) and distinguished the public regulatory functions in Datafin.

This was an application for judicial review brought by Dr Julian West seeking to impugn four decisions of Lloyd's Business Conduct Committee approving minority buy-outs of his memberships or potential memberships in four syndicates. The proceedings concerned decisions made in October and November 2002 under the Major Syndicate Transactions Byelaw (MST Byelaw).

The principal issue reserved for this court was whether Lloyd's was amenable to judicial review in respect of the challenged functions, either generally or as a "public authority" under section 6 of the Human Rights Act 1998. Procedurally, Keith J had refused permission on the ground that Lloyd's was not a public authority; the Court of Appeal granted permission for the question to be decided by this court and the question was tried first.

The court examined the institutional and statutory framework: Lloyd's is a statutory corporation governed by the Lloyd's Acts 1871-1982; membership is contractual and byelaws are binding on members; the MST Byelaw provided the rules for minority buy-outs; and since December 2000 the Financial Services Authority under FSMA has become the primary statutory regulator with wide powers over Lloyd's and its agents (including specific permissions under section 315 and direction powers in sections 316-318).

The court framed the issues as (i) whether the functions in question were governmental or public in character so as to attract judicial review, and (ii) whether, for the purposes of HRA section 6, Lloyd's was a "public authority" in relation to those acts. Applying authorities such as R v Lloyd's of London ex p Briggs, Datafin, Poplar Housing Association v Donoghue, Heather and Aston Cantlow, the court concluded the impugned decisions were private law in nature. The contractual matrix governed the relationship between members and managing agents; Lloyd's powers derived from private Acts and its regulatory activity in this area was subject to statutory supervision by the FSA. Datafin was not analogous because the Takeover Panel exercised regulatory control in a public sphere where governmental regulation was absent.

Subsidiary findings included that the case did not concern disciplinary functions or regulatory actions for the protection of policy-holders, and that if Dr West wished to pursue private law remedies he would need to start fresh proceedings in the appropriate division (the Chancery Division) identifying private law causes of action.

The Court of Appeal dismissed the claimant's application on the reserved issue and declared that Lloyd's was not amenable to judicial review, whether by virtue of section 6 of the Human Rights Act 1998 or otherwise, in relation to the functions under scrutiny. Rationale: the decisions were private, contractual matters between members and managing agents; Lloyd's objectives are commercial; and the Financial Services Authority under FSMA is the governmental regulator responsible for the public-law regulatory functions.

Keith J refused permission for judicial review on 6 May 2003. On 3 October 2003 the Court of Appeal (Ward and Latham LJJ) granted permission and directed that the question whether Lloyd's was amenable to judicial review (including under HRA s6) be reserved and tried first; this judgment ([2004] EWCA Civ 506) determines that reserved issue.