Willford, R (On the Application Of) v Financial Services Authority

Where Parliament provides a specialist statutory procedure for a full reconsideration of a regulator’s decision, judicial review will ordinarily be withheld. Intervention remains possible only in exceptional circumstances, assessed by reference to the statutory scheme, the nature of the complaint and the adequacy of the alternative remedy.

A regulatory decision must give intelligible and adequate reasons addressing the principal controversial issues. The required detail depends on the decision’s context. Where an expert tribunal can rehear the matter afresh, the decision-maker may concentrate on the substance and need not answer every submission individually.

The Financial Services Authority issued a Decision Notice imposing a £100,000 penalty on an approved person for failing to exercise due skill, care and diligence as a bank’s group finance director. He sought judicial review, alleging that the Regulatory Decisions Committee had not adequately explained why it rejected his detailed submissions.

Silber J held that the reasons were inadequate, quashed the notice and remitted the matter for reconsideration: [2012] EWHC 1417 (Admin). The Authority appealed. The principal issue was whether judicial review should have been entertained when the respondent could refer the matter to the Upper Tribunal for a complete rehearing. The court also considered whether the Decision Notice complied with the duty to give reasons under section 388 of the Financial Services and Markets Act 2000.

1. The appeal was allowed unanimously. The judge should not have entertained the judicial review claim. The order quashing the Decision Notice was set aside.

2. Only exceptionally will judicial review be entertained where Parliament has supplied an alternative statutory remedy. The relevant enquiry concerns the nature of the dispute, the statutory purpose and whether that remedy provides an appropriate means of resolving the real issue. A full rehearing before the specialist Upper Tribunal formed an integral part of the regulatory scheme established by the Financial Services and Markets Act 2000. It enabled the allegations to be determined afresh and was more appropriate than quashing the notice and returning the matter to the Authority merely for fuller reasons. The judge had therefore misunderstood the legislative scheme and exercised his discretion on a legally erroneous basis (paras [36]–[38]).

3. The tribunal’s inability to quash the notice for procedural error did not make its remedy inadequate. The real issue was whether the regulated person’s conduct fell below the required standard. Remittal for additional reasons would delay, rather than advance, resolution of that issue. The risks of additional allegations or a greater penalty did not establish that fuller reasons from the Regulatory Decisions Committee were essential (para [37]).

4. Although unnecessary to the primary disposition, the Decision Notice gave adequate reasons. Reasons must be intelligible and must enable the recipient to understand why the decision was made and how the principal important controversial issues were resolved. Their required particularity depends on the nature of the decision and the statutory setting. Under section 388, the committee could focus on the substance of a relatively confined complaint and was not required to answer every point in lengthy submissions or to give reasons for its reasons (paras [39]–[44], [46]–[51]).

5. Pill LJ emphasised that access to the Upper Tribunal does not excuse the Authority from complying scrupulously with its statutory procedure or its duty to give reasons. Judicial review remains available where the statutory failure is sufficiently serious in context. Here, however, the notice as a whole crossed the threshold of adequacy. Its reasoning would ideally have been clearer and more focused, since quality rather than length is decisive (paras [64]–[75]).

6. An alternative-remedy objection raised at the permission stage should ordinarily be decided before the substantive merits. That course respects orderly procedure and avoids unnecessary expense (para [38]).

1. Court of Appeal (Civil Division): The Authority’s appeal was allowed unanimously. The High Court should not have entertained judicial review because reference to the Upper Tribunal was the appropriate statutory remedy. The Decision Notice was also adequately reasoned: [2013] EWCA Civ 677.

2. High Court, Administrative Court: Silber J held that the Regulatory Decisions Committee had failed to give adequate reasons, quashed the Decision Notice and remitted the matter for reconsideration: [2012] EWHC 1417 (Admin).