Barclays Plc & Anor v The Financial Conduct Authority

A tribunal may issue a witness summons only where there is a real likelihood that the witness will provide evidence materially assisting determination of an issue. Relevance is necessary but not sufficient. The tribunal must decide whether compelling the witness would be unfair and oppressive, by balancing the value of the evidence, the impact on the witness, and the fairness of the proceedings.

A discontinuance of enforcement proceedings gives rise to a public-law expectation only to the extent that a reasonable recipient would understand its terms to provide finality. A discontinuance directed to enforcement proceedings against an individual did not assure that the individual would never be required to give evidence in separate proceedings against a firm.

The Financial Conduct Authority issued decision notices against Barclays Plc & Anor concerning market communications made during two capital raisings in 2008. One allegation was that Barclays plc breached Listing Principle 3 because its former chief executive, John Varley, recklessly approved an October 2008 announcement and prospectus.

Barclays applied under rule 16 of the Tribunal Procedure (Upper Tribunal) Rules 2008 for a witness summons requiring Mr Varley to give evidence. Mr Varley opposed the application. He relied on the burden of previous regulatory, criminal and civil proceedings, and on the FCA's discontinuance of enforcement action against him. The central issue was whether compelling his evidence would be unfair and oppressive.

1. Application granted. A witness summons should issue requiring Mr Varley to give evidence at the final hearing. Rule 16 of the Tribunal Procedure (Upper Tribunal) Rules 2008 gives the Tribunal a discretion which must be exercised consistently with the overriding objective and the fair determination of the references.

2. The governing question was not relevance alone. Although a witness summons requires a real likelihood that the witness will give materially helpful evidence, the Tribunal had to balance the evidence's value, the effect on the witness, and the fairness consequences of refusing the summons. The party seeking the summons had established relevance. In the circumstances, Mr Varley bore the practical burden of showing unfairness and oppression, although the issue could be resolved without reliance on burden.

3. Mr Varley's evidence was important to the Listing Principle 3 allegation. Recklessness depended on his subjective knowledge and belief. Earlier interviews, a criminal defence statement, and evidence in other civil proceedings did not realistically answer whether he knew that legal advice could not safely be relied upon or whether he appreciated a risk of misleading market disclosures. Only he could address whether he believed the lawyers had been fully informed and why.

4. The Tribunal accepted that the prolonged proceedings had imposed substantial personal, family and professional strain, and that further evidence would bring renewed media exposure and mental stress. Those matters did not establish unfairness or oppression, particularly in the absence of evidence that giving evidence would cause or exacerbate physical or mental illness.

5. The FCA's discontinuance gave finality only to its regulatory enforcement proceedings seeking a penalty and prohibition against Mr Varley. Objectively construed in its context, it did not represent that the FCA would not pursue proceedings against Barclays or that Mr Varley could not be called as a witness. Continuing the Listing Principle 3 allegation was therefore neither irrational nor inconsistent.

6. The importance of the evidence and the public interest in fully determining alleged regulatory breaches by a major bank during a financial crisis outweighed the burden on Mr Varley. The Tribunal directed that the summons be issued.

• Upper Tribunal (Tax and Chancery Chamber): In Barclays' references from FCA decision notices, the Tribunal granted Barclays' application for a witness summons requiring Mr Varley to give evidence on the Listing Principle 3 allegation.