Taveta Investments Ltd v The Financial Reporting Council & Ors

A public regulator may owe a duty of fairness to an identifiable third party where it proposes to publish serious criticism capable of damaging that party’s reputation, even though the third party is outside the regulator’s statutory scheme and was not the subject of the investigation. The third party must have a fair opportunity to respond before the decision-maker reaches a concluded view. A disclaimer may not cure the unfairness; its effectiveness depends on the meaning conveyed by the publication. However, interim relief restraining publication by a public body is subject to the demanding principles applied in public law cases. Conventional procedural unfairness and the risk of reputational harm will not ordinarily constitute the exceptional circumstances required for an injunction.

Taveta Investments Ltd sought judicial review of decisions by the Financial Reporting Council concerning publication of settlement documents arising from disciplinary proceedings against PwC and Stephen Denison concerning the audit of BHS Limited.

Taveta contended that the documents contained express or implied criticism of Taveta, its directors and employees, and that the FRC could not lawfully publish them without first allowing Taveta a fair opportunity to respond. The FRC relied on the public interest in regulatory transparency, a proposed disclaimer and its subsequent consideration of Taveta’s representations. The immediate issue was whether publication should be restrained pending determination of permission and, if granted, the substantive judicial review claim.

1. Serious issue as to meaning. Applying defamation principles to the question of meaning, the Particulars and Settlement Agreement were capable of conveying serious defamatory criticisms of Taveta personnel. The proposed disclaimer was arguably insufficient to remove those meanings because the publication had to be read as a whole. [2018] EWHC 1662 (Admin), [59]–[61].
2. Duty of fairness. The duty to give a person a fair opportunity to answer criticism before publication is not confined to the subject of an investigation. It may protect third parties who become embroiled in an investigation and whose interests may be adversely affected by published findings. The duty arises where a body decides to publish criticism, after considering whether the criticism is necessary and whether anonymisation is possible. [2018] EWHC 1662 (Admin), [62]–[70].
3. Application to the FRC. It was seriously arguable that the FRC owed Taveta this duty and had failed to comply with it. The FRC’s proposed disclaimer did not necessarily discharge the duty. Nor was it shown that Taveta’s representations had been considered by the original decision-makers with an open mind, rather than in an adversarial attempt to defend an earlier decision. [2018] EWHC 1662 (Admin), [75], [79]–[90].
4. Interim publication restraint. Under section 12(3) of the Human Rights Act 1998, “likely” ordinarily means more likely than not, subject to the exceptional possibility of relief where the circumstances justify it. Taveta would otherwise have established a sufficiently strong case on the underlying fairness issue, and publication might have rendered the judicial review nugatory. [2018] EWHC 1662 (Admin), [92]–[94].
5. Public law threshold. Binding first-instance authority required pressing or compelling grounds, or exceptional circumstances, before restraining publication of a public body’s report. The court declined, despite serious reservations, to depart from that established approach. Taveta’s conventional judicial review challenge and alleged reputational harm did not meet the threshold. Interim relief was therefore refused. The court indicated that permission for judicial review was likely to be granted, subject to further submissions.

Not stated in the judgment.