Financial Conduct Authority v Skinner & Ors

On an application for an interim payment, the court must be satisfied that the claimant would obtain judgment for a substantial sum if the claim proceeded to trial. The payment must not exceed a reasonable proportion of the likely final judgment.

In assessing that proportion, the court’s discretion is broad. It may consider the defendant’s financial position and any effect on the ability to defend the proceedings. However, where defendants have been given a clear opportunity to provide financial evidence and fail to do so, the court is not required to assume that they lack sufficient means. Under section 382 FSMA, the ultimate amount is a just amount, assessed by reference to profits, loss and other relevant circumstances.

The Financial Conduct Authority sought interim payments from the third, fourth, fifth and sixth defendants in proceedings concerning alleged contraventions of FSMA. The application was made under CPR 25.7(1)(c), relying on the proposition that the claimant would obtain judgment for a substantial sum at trial.

The defendants had been given an opportunity to provide evidence concerning their financial means but had not done so. The court therefore had to determine whether the statutory and procedural conditions for interim payments were met and, if so, what proportion of the likely judgment would be just and reasonable.

1. The application for interim payments was granted. In light of the defendants’ admissions and the investment sums involved, the court was satisfied that, if the claim proceeded to trial, the claimant would obtain judgment for a substantial amount within CPR 25.7(1)(c).
2. Under section 382 FSMA, the court may require a person who has contravened the legislation or been knowingly concerned in a contravention to pay profits, loss, or a combination of both. The underlying question is the just amount.
3. The discretion governing the amount of an interim payment is broad. The court must order no more than a reasonable proportion of the likely final judgment. It may consider broader matters, including apportionment of blame and the defendants’ financial position, particularly where payment may affect their ability to defend the proceedings.
4. The defendants had received a clear opportunity to provide financial information. In the absence of such evidence, the court could not assume that they lacked the means to meet an order, and an adjournment was neither necessary nor just.
5. Taking the minimum sums likely to be found appropriate at trial and applying a reduced proportion, the court ordered joint and several payments of £150,000 against the two companies, £100,000 against Mr Mongalar and £90,000 against Mr Miller.