The Financial Conduct Authority v Grout

The Court of Appeal allowed the Financial Conduct Authority's appeal against an Upper Tribunal decision that an FCA notice identified the respondent, Mr Grout, for the purposes of section 393 of the Financial Services and Markets Act 2000. The court applied the Supreme Court's formulation in Macris v Financial Conduct Authority [2017] UKSC 19: a person is identified in a notice only if named or described by a synonym that, from the notice itself or from freely and publicly available information used only to interpret the notice, clearly identifies a single individual. The court held that collective expressions in the Notice such as "traders on the SCP" did not identify one person and that isolated references to "one trader" were anonymous in context. The respondent's application to admit further evidence was dismissed as irrelevant to the controlling legal test.

Background and procedural posture

• The FCA issued warning/decision/final notices criticising JP Morgan's conduct in relation to the Synthetic Credit Portfolio (SCP) and made findings of misconduct at multiple levels, including references to "traders on the SCP". Following earlier authority in this court (Macris, Court of Appeal) the Upper Tribunal held that the Notice identified one of the SCP traders, Mr Grout, entitling him to receive the Notice and make representations. The FCA appealed to the Court of Appeal.
• The appeal was heard after the Supreme Court's decision in Macris v Financial Conduct Authority [2017] UKSC 19, which reformulated the correct test for identification under section 393 of the Financial Services and Markets Act 2000.

Nature of the claim/application

• The respondent sought a declaration that he was identified in the FCA's Notice under section 393 and the attendant right to make representations; he also applied to admit further press and documentary material said to identify him.

Issues framed by the court

1. What is the correct legal test for when a person is "identified" in a notice under section 393? (Responding to the Supreme Court's Macris formulation.)
2. Applying that test, whether the Notice identified Mr Grout.
3. Whether additional evidence should be admitted.

Reasoning and disposition

The court treated the Supreme Court's test in Macris [2017] UKSC 19 as governing. That test requires either naming or description by a synonym that plainly applies to a single individual and whose identity can be ascertained from the notice itself or from straightforward reference to publicly available material used only to interpret the notice. Collective descriptions such as "traders on the SCP" do not name or constitute a synonym for a single person. Isolated references to "one trader" in the Notice were anonymous in context and did not amount to naming or equivalent identification. Consequently, on the correct test Mr Grout was not identified and so was not entitled to a copy of the Notice or to the section 393 procedural rights. The court also refused to admit further evidence as it would not affect the outcome under the controlling test. The FCA's appeal was allowed, the respondent's reference to the Upper Tribunal was dismissed, costs were ordered against the respondent, and permission to appeal to the Supreme Court was refused.

The appeal is allowed. Applying the Supreme Court's test in Macris [2017] UKSC 19, a person is identified in a section 393 notice only if named or described by a synonym that, from the notice itself or straightforwardly available public information used only to interpret it, identifies a single individual. The Notice's collective references to "the traders on the SCP" and isolated anonymous references to "one trader" did not identify Mr Grout; the Upper Tribunal had applied the earlier, now-rejected Court of Appeal test. The respondent's application to admit further evidence was dismissed as immaterial.

Appeal from the Upper Tribunal (Tax and Chancery Chamber), Judge Timothy Herrington & Mark White (Member), [2016] UKUT 302 (TCC). The Court of Appeal considered and applied the Supreme Court's decision in Macris v Financial Conduct Authority [2017] UKSC 19 and reversed an earlier Court of Appeal approach in Macris [2015] EWCA Civ 490 that the Upper Tribunal had followed.