To donate, please click here!
On 21 March 2022, the APPG filed judicial review proceedings in the High Court (Administrative Division) challenging the FCA’s decision not to act on John Swift QC’s findings that the IRHP Redress Scheme adopted flawed eligibility criteria, excluding a third of customers who were deemed to be ‘sophisticated’. The claim explains that the FCA has not disclosed key documents that were relevant to its decision-making and asks that the Court order further disclosure if the Court grants the APPG permission to pursue its claim.
On 29 June 2023, the High Court granted the APPG permission to bring its judicial review, meaning that the case will now proceed to a full hearing. A copy of the judgment is available here.
The High Court also made a cost-capping order. The High Court ordered that if either party to the proceedings is unsuccessful and ordered to pay costs, the costs will be capped at 40% of what the APPG is able to fundraise. Therefore, 40% of the funds raised to date and going forward will be held in reserve for this purpose. If the APPG is successful, those funds can be released to meet any of the APPG’s own outstanding costs. A copy of the judgment is available here.
The judicial review will require significant investment of time by the APPG and its legal team. Whilst the legal team have all committed to offer at least 75% of their time on a contingent basis (limited to any costs that may be recovered from the FCA), the level of funding required to pursue the judicial review is estimated to be much higher.
The APPG met its initial target of £100,000 to fund 25% of the legal team’s costs and additional disbursements, such as court fees. However, the APPG requires further funding of £100,000, for two reasons.
- First, the cost of the early stages of the litigation exceeded estimates, primarily because there was protracted correspondence between the legal teams in which the APPG sought to obtain disclosure of relevant documents from the FCA. The APPG was successful in obtaining key documents during these exchanges which enabled the APPG to file an amended claim with more relevant information about how and why the FCA made its decision. However, there is further work to do in relation to disclosure as many requests remain outstanding. The APPG considers it is of paramount importance to promote transparency and ensure that the FCA is in compliance with its legal duty of candour in the context of these proceedings.
- Second, fundraising is required to meet the APPG’s potential exposure to adverse costs. The APPG has no resources for these proceedings beyond those raised on CrowdJustice, and it therefore applied for a costs capping order to limit its potential liability to pay the FCA’s costs, if the claim is unsuccessful. The High Court ordered that if either party to the proceedings is unsuccessful and ordered to pay costs, the costs will be capped at 40% of what the APPG is able to fundraise. Therefore, 40% of the funds raised to date and going forward will be held in reserve for this purpose. If the APPG is successful, those funds can be released to meet any of the APPG’s own outstanding costs. Any surplus will be returned to donors if it is not required (although it is unlikely that there will be a surplus)
The upshot of the above is that, of the c. £100,000 raised to date, £40,000 must now be held on account of possible adverse costs risks. The APPG is seeking to raise a further £100,000. If successful, that will enable costs and disbursements of up to £120,000 to be paid, with the balance of £80,000 being held to meet the APPG’s potential adverse costs liability.