The All-Party Parliamentary Group on Fair Business Banking, R (on the application of) v The Financial Conduct Authority

At the permission stage of judicial review, the claimant must show an arguable claim; an arguable defence does not answer that question. The statutory materiality test will not ordinarily defeat an otherwise arguable claim where the defendant has not shown that the claimant is highly likely to obtain substantially the same outcome.

A representative public-interest group may have sufficient interest where the challenge falls within its established field of activity and reflects a particular, legitimate concern. A later public-law decision may be challenged notwithstanding an earlier decision where it was separately made in changed circumstances and on distinct reasoning.

The claimant, an all-party parliamentary group concerned with fair business banking, sought permission to challenge the Financial Conduct Authority’s December 2021 decision to take no further action following an independent lessons-learned review of the historic interest-rate hedging products redress scheme.

The proposed grounds were substantive unreasonableness, including legally inadequate reasoning, and procedural unfairness or insufficient enquiry. The Authority relied on the statutory materiality test, standing, delay, collateral challenge and abuse of process. The court granted permission and determined the threshold issues and costs-management matters.

1. Permission granted. The claimant crossed the threshold of arguability on both substantive and procedural grounds. The question was whether the claimant had an arguable claim, not whether the Authority had an arguable defence. The “highly likely” statutory materiality test under the Senior Courts Act 1981, section 31(3C) and (3D), was not satisfied.
2. Standing. The claimant had a sufficient interest. Its challenge fell within its field of interest, was linked to its foundational purpose, and involved a particular, legitimate concern. Possible better-placed individual challengers did not defeat standing. An unincorporated association had legal capacity, and joinder of an individual claimant was unnecessary to validity.
3. Delay and collateral challenge. The objections failed. The impugned December 2021 decision was a distinct public-authority decision taken in light of the independent review and its reasoning. Questions of stability and reliance were relevant to reasonableness, not a procedural bar.
4. Substantive ground. It was realistically arguable that the Authority had relied on a merits disagreement with the independent reviewer without adequately engaging with the reviewer’s analysis or giving coherent, legally adequate reasons. The contractual-entitlement and legitimate-expectation arguments did not satisfy the highly likely outcome test. The Authority’s consumer-protection objective under the Financial Services and Markets Act 2000, section 1C(1), formed part of the context.
5. Procedural ground. It was realistically arguable that deliberately aligning publication of the review, response and decision deprived informed interested voices of a meaningful opportunity to make representations before minds were made up. That could engage common-law fairness and reasonable sufficiency of enquiry.
6. A reciprocal costs cap was imposed at 40% of the claimant’s funds raised for the claim, and time was extended for the Authority’s detailed grounds and evidence.