The Underwritten Warranty Company Ltd (t/a the Insurance Backed Guarantee Company) & Anor, R (on the application of) v Fensa Ltd & Ors

A private body operating a competent person self-certification scheme may fall outside judicial review where the challenged decision concerns contractual arrangements made to operate the scheme, rather than the exercise of a public law power. The statutory building-control framework and authorisation of the scheme do not, without more, convert those arrangements into public functions.

In assessing rationality, the court must consider whether materially like cases were treated alike, but bespoke arrangements, differing contractual positions and substantial differences in financial backing may justify different treatment. A decision-maker generally determines the manner and intensity of relevant inquiry, subject to Wednesbury review. Fairness does not require further dialogue where the affected party knows the decisive concern and cannot meet the applicable contractual requirements.

The claimants supplied insurance-backed guarantees used by installers participating in FENSA’s competent person scheme under the Building Regulations 2010. After the collapse of the original underwriter, the replacement cover was arranged through a Guernsey protected cell and lacked access to the UK Financial Services Compensation Scheme and Financial Ombudsman Service required by FENSA’s contractual approval terms.

FENSA removed or suspended the claimants’ product from its approved list. The claimants sought judicial review, alleging that the decision was amenable to review and was irrational, inadequately reasoned, reached without reasonable inquiry and procedurally unfair. The central issue was whether FENSA’s decision was a public law decision or a private contractual decision.

1. Judicial review. The claim was dismissed. FENSA’s decision to remove the claimants’ insurance-backed guarantee from its approved list was not amenable to judicial review. Although competent person schemes formed part of the statutory building-control framework, self-certification was an alternative form of opted-out self-regulation. The Building Regulations 2010 and the Conditions of Authorisations left operators substantial latitude in constructing their schemes. The source of FENSA’s power to self-certify lay in its acceptance and operation of a compliant scheme, not merely in its identification in the Regulations. The relevant arrangements were contractual and governed by private law.
2. The statutory framework did not make the decision public merely because it supported a regulatory scheme. Installers were not required to join a competent person scheme, could use local-authority control, and could choose between competing schemes. Parliament would not necessarily intervene if no private operator ran such a scheme.
3. Alternative merits conclusions. Even if judicial review had been available, the grounds failed. FENSA was entitled to require access to the UK Financial Services Compensation Scheme and Financial Ombudsman Service as additional contractual quality safeguards, although those requirements were not expressly imposed by condition 17 of the Conditions of Authorisations.
4. The claimants had not shown irrational unequal treatment. Network VEKA was subject to a bespoke arrangement, was not on the public approved list, had no equivalent contract, and had materially greater financial backing. The evidence concerning IWG did not establish that FENSA had abandoned its requirement for FSCS access; FENSA had investigated the issue. The decision was therefore defensible.
5. The reasons were legally adequate. References to the protected-cell model were connected with the absence of FSCS and FOS access and did not reveal an incoherent or retrospective justification. The inquiry into the replacement product was sufficient: the decision-maker determines the manner and intensity of inquiry, subject to Wednesbury review. There was no procedural unfairness because the claimants knew of the FSCS and FOS concerns and could not satisfy the contractual requirements.