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The Court of Appeal has handed down judgment today dismissing the appeal brought by Holmcroft Properties Limited in an important case concerning the circumstances in which a private body can be said to exercise a public function that is amenable to judicial review.

The case arises in the context of the Financial Service Authority’s investigation into the sale of interest rate hedging products by high street banks, and the steps taken by banks in response to that investigation. Barclays Bank Plc appointed KPMG LLP as a skilled person under s.166 Financial Services and Markets Act 2000 to produce a report on a review and redress exercise it proposed to conduct, for the benefit of both Barclays and the FSA. KPMG was also charged with assisting Barclays in making offers of redress to customers in consequence of the terms of a settlement that Barclays had reached with the FSA. In relation to each proposed offer of redress, KPMG had to provide a view as to whether the redress was appropriate, fair and reasonable, and offers would only be made to customers if KPMG confirmed they were appropriate. The main issue in the appeal was whether, in performing that function, KPMG was amenable to judicial review. Holmcroft argued that KPMG was amenable. Each of KPMG, Barclays and the Financial Conduct Authority argued to the contrary.

The Court of Appeal upheld the conclusion of the Divisional Court that KPMG was not exercising a public function that was amenable to judicial review. The main basis of the Court’s reasoning was that KPMG was essentially offering assistance in relation to a dispute about private law rights in a private law context. The Court also indicated that if it had reached a different conclusion on amenability, it would gone on to dismiss the appeal on the facts or as a matter of discretion in any event. There were no grounds in public law for a complaint.  

Click here for the full judgment.

Javan Herberg QC and Hanif Mussa acted for the Respondent, KPMG LLP, instructed by Herbert Smith Freehills LLP

Kerenza Davis acted as junior counsel for the First Interested Party, the Financial Conduct Authority, instructed by Baker & McKenzie

Dinah Rose QC and Ben Jaffey QC acted for the Second Interested Party, Barclays Bank Plc, instructed by Linklaters LLP

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