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

In non-environmental judicial review, a costs capping order requires satisfaction of the statutory preconditions and a separate assessment of whether a cap, and its terms, are appropriate. Proceedings may be of general public importance where they raise significant issues about the lawfulness of a public body’s evaluative reasoning, procedural fairness or statutory functions. The court must balance protection of a claimant from prohibitive costs against fairness to the public authority and the public interest in avoiding expenditure on unmeritorious claims. A reciprocal cap may validly be expressed as a percentage of funds raised, rather than a fixed sum. The court may refuse to require an individual co-claimant merely to improve enforceability of costs, where enforcement is realistically achievable and future necessity can be addressed if it arises.

The claimant, a parliamentary group, brought judicial review proceedings concerning the Financial Conduct Authority’s response to an independent review of the treatment of interest-rate hedging product mis-selling and the exclusion of certain businesses from a redress scheme. Permission for judicial review had been granted. The court had previously announced that it would impose a reciprocal costs cap and extend the time for the Authority’s detailed grounds and evidence.

This judgment gave reasons for the proposed cap, refused the Authority’s application to require an individual officeholder or member of the group to be joined as co-claimant, and extended time to 29 September 2023. The central issues were whether the statutory conditions for a judicial review costs capping order were met, what form the order should take, and whether an individual co-claimant was necessary.

1. Costs capping order. The claimant satisfied the prescribed conditions under the Criminal Justice and Courts Act 2015, ss.88 and 89, and CPR 46.17–46.19. The required application and information had been provided, the claimant would reasonably withdraw without protection, and permission for judicial review had been granted.
2. The proceedings were “public interest proceedings”. They concerned issues of general public importance under s.88(7), informed by the statutory relevancies in s.88(8). The issues included whether a maintained merits disagreement justified rejecting an evaluative conclusion of an independent review, how reasonableness and legally adequate reasons operate in that context, and whether the Authority had fairly organised its procedure. Judicial review grounds raise issues of law, including where the complaint concerns context-sensitive public law standards.
3. The court then considered whether a cap was appropriate and its terms, having regard to all relevant considerations and the s.89(1) relevancies. The claimant’s lack of personal financial benefit beyond vindication supported a cap. The court also considered the scale of the potential redress implications, the claimant’s funding arrangements, the Authority’s expenditure, and the need to balance protection of access to justice with avoiding undue depletion of public resources.
4. A zero cap was unjustified. A reciprocal cap set at 40% of the funds raised by the claimant was appropriate, necessary to prevent reasonable withdrawal, and sufficiently protective of both parties. The percentage mechanism was within the court’s power under s.88(2), and parity was required by s.89(2). The cap remained subject to variation under CPR 46.19 and to the court’s later discretion on costs.
5. The application to require an individual co-claimant was refused. Joinder was not necessary to make directions, disclosure or confidentiality workable. Its only realistic purpose would have been enforcement of a costs order, and no realistic enforcement problem had been shown. Any future necessity could trigger joinder then.
6. Time for the Authority’s detailed grounds and evidence was extended to 29 September 2023. The claim was to proceed expeditiously once the evidence was complete.