Courts, regulators and judicial reviews
From the blog: The threat of judicial review is ever-present for regulators, and this is as true in the pensions sphere as in any other. Inevitably those subject to regulation will be concerned to ensure that decisions made by their regulator are procedurally fair, proportionate, rational and consistent.
These concerns are bound to be intensified by the size of the sums of money and significance of the commercial interests at stake where pensions are concerned.
What a regulated company may consider fair may not be perceived in the same light by scheme members, the PPF or those who contribute to it
The response of the UK courts to judicial review of regulators, including the Pensions Regulator, has been a measured one. While the function of judicial review can be said to be to highlight weaknesses in a regulator’s structures and processes, the courts are also alert to the possibility that a claim may be brought in order to delay, frustrate or manipulate a proper regulatory process.
So, while an individual or company subject to regulation may argue that his application for judicial review is brought in order to ensure good quality, transparent and fair decision-making, the regulator may argue in response that in truth the application is aimed at avoiding the consequences of improper conduct, subverting the process or getting information to which it is not entitled.
The courts are always careful to defer to the expertise of a specialist body set up by parliament to regulate a particular area.
Where fairness is raised in a regulatory judicial review, the question arises, fairness to whom? The key objectives of the Pensions Regulator include having regard to the interests of members of pension schemes and the Pension Protection Fund.
What a regulated company may consider fair may not be perceived in the same light by scheme members, the PPF or those who contribute to it. This point is not lost on the courts and they are able to balance these other interests against those of a regulated body that makes an application for judicial review.
Another risk, although one not yet realised in a reported case in the pensions world, is an application for judicial review by those whom a regulator is expected to protect.
In other regulatory contexts there have been claims brought by those who are dissatisfied with the efforts made by the regulator to protect their interests. It remains to be seen whether such a claim would ever be made against the Pensions Regulator.
The availability of judicial review serves to maintain public confidence in pensions regulation, but the courts are careful not to allow it to undermine confidence in a regulator which is doing its job properly.
Fenella Morris QC is a barrister with 39 Essex Chambers