Briceamery Capital Ltd v The Financial Conduct Authority

A regulatory decision may be wrong without being unreasonable. Its reasonableness is assessed against the facts known, or which ought to have been known, when it was made.

For costs, unreasonable conduct is assessed by how a party handled the Tribunal proceedings; an erroneous assertion alone is generally insufficient. When a party withdraws, the Tribunal considers why it withdrew, whether it could have withdrawn earlier and whether it was unreasonable not to do so. A costs schedule must also permit summary assessment. Even if those requirements are met, an award remains discretionary.

The Financial Ombudsman Service ordered Briceamery Capital Ltd (BCL), a regulated firm, to pay a complainant who said he was Mr A for an investment loss. BCL alleged that the complainant was Mr B impersonating Mr A and did not comply with the award. The Financial Conduct Authority (the Authority) cancelled BCL’s permission because of that non-compliance. BCL referred the decision to the Upper Tribunal.

After obtaining further information about the complainant’s identity, the Authority issued a notice discontinuing its action and withdrew its case. BCL then sought £1,122,067 in costs, alleging that the decision was unreasonable and that the Authority had acted unreasonably in defending or conducting the proceedings. The Tribunal considered the costs jurisdiction, the applicable reasonableness tests, the adequacy of BCL’s schedule and whether it should exercise its discretion to award costs.

1. Application refused. The Authority’s decision was not unreasonable under Rule 10(3)(e) of the Tribunal Procedure (Upper Tribunal) Rules 2008, and the Authority did not act unreasonably in defending or conducting the Tribunal proceedings under Rule 10(3)(d).

2. Whether a decision was unreasonable is distinct from whether it was right. The Tribunal assessed the Authority’s decision on the facts known, or which ought to have been known, when the decision was made. Although the Authority could have checked the complainant’s identity earlier, its role in relation to the Financial Ombudsman Service, the outcome of BCL’s judicial review, the National Crime Agency’s determination and the complainant’s account of providing identity documents meant that failing to make its own checks was not unreasonable.

3. For unreasonable conduct, the focus is the handling of the Tribunal case. An incorrect assertion is not automatically unreasonable; generally, the party must persist despite an unbeatable argument. The inquiry can include whether a respondent unreasonably resisted an obviously meritorious appeal, prolonged proceedings or failed to withdraw earlier. The Tribunal applied the approach in Market Opinion and Research International Ltd v HMRC [2015] UKUT 12 (TCC) and the withdrawal questions in Tarafdar v HMRC [2014] UKUT 362 (TCC). It found the Authority’s time to seek further information and complete its internal discontinuance steps reasonable.

4. The Tribunal’s costs jurisdiction concerned the Upper Tribunal proceedings. It could not award costs incurred in the judicial review or Court of Appeal proceedings. Pre-proceedings costs may be recoverable where they were spent creating materials later used in the Tribunal proceedings, as explained in Distinctive Care v HMRC [2019] EWCA Civ 1010; that did not establish jurisdiction over pre-proceedings conduct as such.

5. Section 394 of the Financial Services and Markets Act 2000 required the Authority to provide the material on which it relied and relevant secondary material. It did not require the Authority to discuss that material with BCL. The Authority’s contacts with a possible witness for the purposes of litigation were protected by litigation privilege, and non-disclosure of the fact of those contacts was not unreasonable.

6. Rule 10(5) required a schedule sufficient to allow summary assessment. BCL’s claimed rate lacked reliable evidential support, and its reconstructed hours were disproportionate and not credible. The schedule therefore could not form the basis for assessment.

7. Finally, even if the conduct threshold and schedule requirements had been met, the Tribunal would have refused costs in its discretion. Mr Ishaque had repeatedly told the Authority that BCL had received no identity documents, although he had received them. In the Tribunal’s view, it would not be in the interests of justice to award costs to a party that had concealed material facts from its regulator. That was an alternative, conditional observation.

BCL referred the Authority’s Decision Notice to the Upper Tribunal on 25 November 2025. The Authority issued a Notice of Discontinuance on 14 April 2026 and withdrew its Tribunal case on 28 April 2026. BCL then applied for costs. The present judgment refused that application; it did not determine an appeal from a lower court.