2024年2月12日
Disputes Quick Read – 3 / 87 观点
ClientEarth v FCA: Challenging Regulator Decisions
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.
本系列内容
Disputes Quick Read: ClientEarth refused permission to pursue directors of Shell
2023年6月1日
作者 作者
Disputes Quick Read: Ethereum Merge - what legal issues arise?
2022年9月22日
作者 Ben Jones, Emma Allen
Disputes Quick Read: New obligations on cryptobusinesses to report under the UK sanctions regime
2022年8月9日
作者 Nick Maday
Disputes Quick Read: New gateway for serving Norwich Pharmacal Orders and Bankers Trust orders out of the jurisdiction
Welcome news for those pursuing fraud claims in the English Courts
2022年7月28日
Disputes Quick Read: Why the modernised LCIA rules are a welcome update
2020年10月7日
作者 Nick Storrs
Disputes Quick Read: Tomlin Orders – ensuring the confidentiality of settlement terms
2020年4月27日
作者 作者
Related Insights
Witness familiarisation - does it affect the court's assessment of witness credibility?
作者 Tim Strong 以及 Helen Brannigan
Disputes Quick Read: ClientEarth refused permission to pursue directors of Shell
作者
Climate change litigation update – ClientEarth issues claim against Shell's directors
作者