Uberoi & Anor, R (on the application of) v City of Westminster Magistrates' Court & Ors

The court decided that the Financial Services Authority (the Authority or FSA) may institute proceedings for offences of insider dealing under Part V of the Criminal Justice Act 1993 without first obtaining the consent mandated by section 61(2) of that Act. The decision turned on the construction of section 402 of the Financial Services and Markets Act 2000 read in its statutory context with section 401 and the remainder of the 2000 Act.

The judges applied a purposive approach to statutory interpretation: although a narrow literal reading of section 402 might not displace section 61(2), the structure, content and purpose of the 2000 Act as a whole demonstrate a clear Parliamentary intention to place the FSA in a concurrent prosecutorial position with other public prosecutors for conduct relating to financial markets. The court therefore held that the words "may institute" in section 402 should be read as enabling the FSA to bring proceedings on its own initiative and without antecedent consent from the Secretary of State or the Director of Public Prosecutions.

Background and parties: The Financial Services Authority laid informations in the City of Westminster Magistrates' Court against Neel and Matthew Uberoi on 17 counts of insider dealing contrary to section 52 of the Criminal Justice Act 1993. The summonses were challenged by way of judicial review on the ground that the FSA had not first obtained the consent required by section 61(2) of the 1993 Act. The magistrates' court (District Judge Purdy) had ruled that the FSA could institute the proceedings without consent.

Nature of the application: The claimants sought judicial review of the magistrates' court ruling and contended that section 61(2) continued to require consent before proceedings for insider dealing could be instituted in England and Wales.

Issues framed by the court: (i) Whether section 402 of the Financial Services and Markets Act 2000, read with section 401, displaces or modifies the section 61(2) consent requirement in the Criminal Justice Act 1993; and (ii) whether the FSA may, in instituting proceedings under Part V of the 1993 Act, do so without the consent of the Secretary of State or the Director of Public Prosecutions.

Key reasoning: The court reviewed the statutory history of insider dealing provisions and the 2000 Act's comprehensive regulatory scheme. It noted that Parliament had explicitly disapplied consent for the Director of the Serious Fraud Office in a different statute (Criminal Justice Act 1987, Schedule 1 paragraph 4) but had not done so in express terms for the FSA in the 2000 Act. Despite that, the court concluded that reading section 402 in isolation produced anomalies incompatible with the clear design and purpose of the 2000 Act. The FSA is the central regulator of financial markets with wide investigatory and enforcement powers under many provisions of the 2000 Act (including powers under Part VIII and investigatory powers under section 165). Section 401 expressly permits the Authority to institute proceedings for offences under the 2000 Act without consent; section 402 should be read to place the FSA in an equivalent position for insider dealing under Part V of the 1993 Act. The purposive and contextual reading therefore authorised the FSA to institute proceedings without the section 61(2) consent.

Outcome: The court dismissed the application for judicial review and upheld the magistrates' court ruling that the FSA may institute insider dealing proceedings without the consent of the Secretary of State or the Director of Public Prosecutions.

The application for judicial review was dismissed. The court held that section 402 of the Financial Services and Markets Act 2000, read in its statutory context with section 401 and the 2000 Act as a whole, should be construed as enabling the Financial Services Authority to institute proceedings for insider dealing under Part V of the Criminal Justice Act 1993 without first obtaining the consent required by section 61(2) of the 1993 Act. The purposive, contextual interpretation of the 2000 Act overcame any narrow literal difficulty with the wording of section 402.

Ruling below: District Judge Purdy, City of Westminster Magistrates' Court (ruling given 19 September 2008) that the Financial Services Authority could institute proceedings for insider dealing without obtaining consent under section 61(2) of the Criminal Justice Act 1993. The present judicial review in the High Court (Administrative Court) challenged that ruling and was dismissed. No further appellate history is stated in the judgment.