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12 February 2024
Disputes Quick Read – 14 of 99 Insights
ClientEarth v FCA: Challenging Regulator Decisions
- Quick read
In August, we reported on ClientEarth's unsuccessful derivative action against Shell's board of directors.
The environmental charity in still making headlines and has, more recently, renewed its challenge in the Administrative Court against the Financial Conduct Authority's (FCA) decision to approve the prospectus of Ithaca Energy – a, now, listed oil and gas operator in the North Sea.
What did ClientEarth want?
After permission was initially refused on the papers, ClientEarth sought a declaration from the Court that the FCA's approval of the prospectus was unlawful, broadly, because Ithaca's disclosure of climate-related risks did not meet the Prospectus Regulation requirements.
ClientEarth claimed the FCA erred in law by approving the prospectus on three grounds:
- The prospectus failed to disclose or adequately describe the materiality of climate-related financial risks.
- The prospectus failed to disclose or adequately describe the specificity of climate-related risks associated with Ithaca's securities.
- The FCA acted irrationally in concluding the prospectus complied with Article 6 of the Prospectus Regulation on the basis that it contained necessary information material to an investor to make an informed assessment of Ithaca's financial position and prospectus.
What did the Court decide?
In Lang J's judgment of 13 December 2023, the Court refused ClientEarth's renewed application for judicial review and held that the three grounds were unarguable and had no real prospect for success.
Comment
ClientEarth's focus on financial regulatory decisions comes as no surprise against the backdrop of the UK Government's commitment to become the world's first Net-Zero aligned Financial Centre, first proposed in November 2021 at COP26. However, it is a rarity for a UK regulator to be challenged this way and is the first challenge of its kind.
Whilst ClientEarth failed to obtain permission to bring a claim against the FCA on this occasion, no doubt listed companies and companies intending to list will be conscious of increased scrutiny when preparing prospectuses and disclosing climate-related risks. However, it remains the FCA's responsibility to approve prospectuses and a high hurdle would need to be overcome to show the regulator's irrationality in coming to its decision.
In this series
Changes to the privilege rules between companies and shareholders
6 December 2024
Victory for energy companies/defeat for the environment?
14 November 2024
Failure to prevent fraud offence to come into force in September 2025
14 November 2024
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Essex Cricket Club charged by Cricket Regulator
30 October 2024
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UK introduces mandatory reimbursement rules to combat APP fraud
15 October 2024
New SFO Director announces bold plans to tackle fraud
21 March 2024
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First of its kind judicial guidance on the use of AI in the courts
14 December 2023
Witness familiarisation - does it affect the court's assessment of witness credibility?
13 December 2023
The use of AI in Trial Witness Statements post-PD 57AC
23 October 2023
by Multiple authors
CAT to hear the first application for a collective settlement approval order
17 October 2023
Pre-Action Protocols – what is different?
12 September 2023
by Tom Charnley
Failure to prevent fraud – a new offence?
14 August 2023
by Multiple authors
Supreme Court rules that APP fraud victims cannot rely on Quincecare Duty
4 August 2023
by Multiple authors
The Law Commission's Consultation Process on the Arbitration Act 1996 – taking stock
21 July 2023
What does the latest decision of the CAT in the Mastercard/Visa proceedings mean for class actions?
10 July 2023
Disputes Quick Read: ClientEarth refused permission to pursue directors of Shell
1 June 2023
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Disputes Quick Read – developments in the fixed costs regime
3 May 2023
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Disputes Quick Read: Service by email – are the rules any clearer?
20 April 2023
by James Bryden
Disputes Quick Read - What do practitioners think about making alternative dispute resolution (ADR) compulsory?
8 March 2023
Disputes Quick Read: What are the litigation trends for 2023?
2 March 2023
Disputes Quick Read: further guidance on witness statement preparation rules
14 February 2023
Disputes Quick Read: A cautionary tale – settlement agreement (un)wittingly releases all claims for fraud
13 February 2023
Disputes Quick Read: Why the UK should join the Hague Judgments Convention 2019
8 February 2023
Disputes Quick Read: extensive information orders granted against crypto exchanges following hack
19 January 2023
Disputes Quick Read: A new approach to giving evidence? WhatsApp with that?
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Disputes Quick Read: Ethereum Merge - what legal issues arise?
22 September 2022
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Disputes Quick Read: New obligations on cryptobusinesses to report under the UK sanctions regime
9 August 2022
by Nick Maday
Disputes Quick Read: Disclosure - What information can be redacted?
25 July 2022
Disputes Quick Read: what claims exist when a smart contract is breached?
6 July 2022
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Disputes Quick Read: New gateway for serving Norwich Pharmacal Orders and Bankers Trust orders out of the jurisdiction
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Disputes Quick Read: Defining the duty - the limits of the responsibility assumed by professionals
27 July 2022
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Disputes Quick Read: Climate change litigation – successful challenge to government's Net Zero Strategy
29 July 2022
Disputes Quick Read: Judicial Review and Courts Act 2022 – now in force
17 June 2022
Disputes Quick Read: an important reminder of the duty to disclose electronic documents in native format
13 June 2022
Disputes Quick Read: ENRC prevails in claim against former solicitor
26 May 2022
Disputes Quick Read: Climate change litigation update – McGaughey v Universities Superannuation Scheme Limited
31 May 2022
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Don't lose your keys: Bitcoin developers do not have a duty to assist owners in recovering lost cryptocurrency
4 April 2022
Disputes Quick Read: The new witness statement preparation rules – a year on
5 April 2022
Disputes Quick Read: ClientEarth v Shell – climate change litigation shifts focus to UK companies
31 March 2022
by Multiple authors
Disputes Quick Read: High Court rules that failure to provide adequate data security is not a positive act
21 September 2021
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Disputes Quick Read: Key changes to the Disclosure Pilot Scheme
13 September 2021
Disputes Quick Read: Judicial Review and Courts Bill – unpacking the UK government's proposed amendments
6 September 2021
Disputes Quick Read: Will litigants be compelled to participate in alternative dispute resolution?
2 August 2021
Disputes Quick Read: Freezing injunctions – maximum custodial sentence imposed for breach
21 July 2021
Disputes Quick Read: The online future of civil justice – the end of the legal profession or the end of legal drudgery?
15 July 2021
by Jess Thomas
Disputes Quick Read: Will the courts change forever post-COVID?
26 May 2021
Disputes Quick Read: One Blackfriars administrators cleared of misfeasance
5 May 2021
Disputes Quick Read: Not your prerogative – the Independent Review of Administrative Law reports its recommendations on judicial review
21 April 2021
Disputes Quick Read: Amendments to the Disclosure Pilot Scheme – a step in the right direction
31 March 2021
Disputes Quick Read: UK Supreme Court rules on the territorial extent of the SFO's powers
26 February 2021
by Tim Strong
Disputes Quick Read: No dropping anchor – parent company liability for environmental claims
24 February 2021
Disputes Quick Read: What lawyers need to know about new witness statement preparation rules
20 January 2021
Disputes Quick Read: Should you still choose the English courts to have jurisdiction in your international contracts after Brexit?
12 January 2021
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Disputes Quick Read: Privilege lost in the EU post-Brexit (with exceptions)
23 November 2020
Disputes Quick Read: Law on interest applicable to US dollar awards reaffirmed
16 October 2020
Disputes Quick Read: Care required when drafting SPA claim notices
23 September 2020
Disputes Quick Read: Why the modernised LCIA rules are a welcome update
7 October 2020
by Nick Storrs
Disputes Quick Read: COVID-19 and supply chain disruption – key issues
9 April 2020
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Disputes Quick Read: High Court orders parties to explore options for 5-week remote trial
15 April 2020
Disputes Quick Read: Tomlin Orders – ensuring the confidentiality of settlement terms
27 April 2020
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Disputes Quick Read: UK's OFSI fines Standard Chartered Bank £20 million for sanctions breaches
21 April 2020
Disputes Quick Read: A different approach to witness evidence
11 March 2020
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Disputes Quick Read: Coronavirus - a growth in virtual courts?
17 March 2020
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Disputes quick read: climate change activism by litigation
26 February 2020
Disputes Quick Read: Commercial Court's arbitral power shift
21 February 2020
Disputes Quick Read: Court stays evictions during COVID-19 – is this lawful?
2 June 2020
Disputes Quick Read: Will the civil justice system change forever post COVID-19?
16 June 2020
Disputes Quick Read: Retailers reign supreme in Visa and Mastercard proceedings
9 July 2020
Disputes Quick Read: The contra proferentem rule reconsidered?
21 July 2020
Disputes Quick Read: Scope of duty and the SAAMCo counterfactual following Manchester Building Society
3 December 2021
Disputes Quick Read: Facilitating transactions in cryptoassets - Lord Leggatt and the point of commercial law
24 November 2021
by Stuart Broom
Disputes Quick Read: Privy Council clarifies the law on freezing injunctions in aid of foreign proceedings
8 October 2021
Disputes Quick Read: Climate change litigation – what's the latest?
10 January 2022
Disputes Quick Read: Court decisions on the Disclosure Pilot Scheme – the 2021 roundup
20 January 2022
Disputes Quick Read: Assumption of responsibility - tax schemes and investors
22 March 2022
Disputes Quick Read: Dealing in crypto? Be careful what you call it
7 April 2022
