R (Willford) v Financial Services Authority

The Court of Appeal allowed the Financial Services Authority's appeal against Silber J's order quashing a Decision Notice issued under the Financial Services and Markets Act 2000. The court held that, in the statutory regulatory scheme established by the Act, a person aggrieved by a Decision Notice ordinarily has an alternative remedy by way of reference to the Upper Tribunal under section 67 and that judicial review should only be entertained in exceptional cases. The judge below was held to have erred in law by failing properly to identify the legislative intention behind the statutory scheme and by entertaining the judicial review claim instead of leaving the matter to the tribunal. The court further expressed the view (Moore-Bick LJ) that the reasons given in the Decision Notice met the requirements of section 388, although he considered it unnecessary to decide that point for disposal of the appeal. Pill LJ agreed with the result but emphasised the statutory duty to give intelligible reasons and that court intervention remains open where the statutory procedure has not been followed scrupulously.

Background and parties: Christopher Willford, then Group Finance Director of Bradford & Bingley plc, sought judicial review of a Decision Notice issued by the Financial Services Authority (FSA) under the Financial Services and Markets Act 2000. The FSA, through its Regulatory Decisions Committee (RDC), had concluded that Willford breached Principle 6 and imposed a financial penalty.

Nature of the application and relief sought: Willford applied for judicial review to quash the Decision Notice on the ground that the RDC had failed to give adequate reasons in breach of the statutory requirement (section 388) and that this procedural defect caused substantial prejudice.

Procedural history: Silber J in the Administrative Court quashed the Decision Notice and remitted the matter to the RDC. The FSA appealed to the Court of Appeal. The case reached the Court of Appeal on an appeal from Silber J ([2012] EWHC 1417 (Admin)).

Issues before the Court of Appeal:

• whether judicial review was an appropriate forum given the statutory alternative remedy of reference to the Upper Tribunal under section 67;
• whether the Decision Notice contained adequate reasons in compliance with section 388 of the Act;
• whether the relief granted by Silber J (quashing and remit) was appropriate.

Court's reasoning and disposition: The court analysed the statutory regulatory scheme (including sections 64, 66, 67, 388 and 395) and precedent on the interaction between statutory appeal remedies and judicial review. The majority concluded that the availability of a full rehearing by the Upper Tribunal is a central feature of the scheme and ordinarily renders judicial review inappropriate except in exceptional circumstances. Moore-Bick LJ held that Silber J erred in law by failing to give proper weight to the statutory scheme and the alternative remedy and that the Decision Notice need not be quashed on the grounds advanced. He also expressed the view (unnecessary to the disposal) that the Decision Notice did provide adequate reasons. Pill LJ agreed with allowing the appeal but emphasised that the statutory duty to give reasons must be taken seriously and that court intervention remains open where the FSA has not complied scrupulously with statutory procedural requirements. Lady Justice Black agreed with Moore-Bick LJ.

Wider context: The judgment emphasises the integrative role of the Upper Tribunal in the FSMA disciplinary scheme and limits the circumstances in which judicial review will be permitted to challenge FSA Decision Notices. The court nonetheless reaffirmed the importance of intelligible reasons being given by the RDC.

Appeal allowed. The Court of Appeal held that Silber J erred in law in entertaining the claim for judicial review instead of leaving the matter to the statutory alternative remedy (reference to the Upper Tribunal under section 67). The appellate court concluded that the statutory scheme ordinarily requires disputes about Decision Notices to be resolved by the tribunal and that, viewed in context, the Decision Notice's reasons were sufficient; accordingly the quashing order was wrongly made.

Appeal from the Administrative Court (Silber J: [2012] EWHC 1417 (Admin)), where the Decision Notice had been quashed on 25 May 2012. The appeal was heard in the Court of Appeal and allowed ([2013] EWCA Civ 677).