Significant Court of Appeal judgment on FCA's redress powers

The Court of Appeal has published its much anticipated judgment in the BlueCrest v FCA case.

For the details, read our briefing note. By way of overview:

• The Court confirmed that the s.55L FSMA own initiative requirement (OIREQ) power can in principle be used to require a firm to pay redress.  Even if the specific criteria in other FSMA redress provisions are not met.  For example, there need not be loss, breach of duty, causation or actionability. This confirms the potential breadth of the OIREQ power and the relatively low statutory threshold for its exercise. 
• The Court also set out a new test for establishing when the FCA can amend its case before the Upper Tribunal.  This new test is broad and leaves investigation subjects with greater uncertainty about how much the case might change (potentially significantly) after an Upper Tribunal referral has been made. 

The Court’s decision on redress is particularly significant in the context of the FCA communicating its intention to make greater use of its supervisory intervention powers.  It also raises some important questions about whether the “JR plus” jurisdiction of the Upper Tribunal in relation to supervisory notices is really an adequate check and balance, particularly since the FCA has removed some of its internal procedural safeguards that previously applied to it exercising its supervisory interventions powers.

Please reach out to us or your usual Linklaters contact if you would like to speak further about the decision and its implications.