The Court of Appeal recently upheld the decision of the Divisional Court and agreed, in R (Holmcroft Properties Ltd v KPMG LLP, that KPMG was not amenable to judicial review when acting as an independent reviewer of a bank's redress scheme.

However, while both courts ultimately reached the same conclusion, their reasons for doing so were quite different and in that context there continues to be a lack of clarity on the factors to be taken into account in assessing whether or not a private body is exercising a public function which makes it amenable to judicial review.


Barclays Bank had voluntarily agreed with its regulator, the Financial Services Authority (now the Financial Conduct Authority - the FCA), to establish a redress scheme for customers that had been mis-sold interest rate hedging products.

In doing so it also agreed that with regard to its redress offers it would seek an opinion from a 'skilled person' appointed by it, and approved by the FCA, to act as an Independent Reviewer. The role of the Independent Reviewer was to decide whether the redress arrangements were appropriate, fair, and reasonable (the AFR assessment).

The appellant applied for and was offered compensation under the redress arrangements. KPMG as the Independent Reviewer had made an AFR assessment approving the offer and it was this decision of KPMG that the appellant challenged by way of judicial review.

KPMG is a private entity (a major accountancy and consulting firm) and therefore the first question for the courts was whether it was amenable to judicial review in its capacity of Independent Reviewer.


In reaching its decision the Divisional Court had concluded that the role of the Independent Reviewer did not have sufficient "public law flavour" to make KPMG amenable to judicial review. Its reasons for this were that (i) the redress scheme was a voluntary scheme, (ii) the arrangement between Barclays and KPMG was contractual, (iii) it was not enough to say that KPMG was amenable because the role of the Independent Reviewer promoted the regulator's objectives, (iv) the regulator did not have any statutory obligation, or indeed the resources, to carry out the role itself, and (v) complaints about the failure of the operation of the redress arrangements as between the bank and KPMG could be made to the FCA and its decision on any such complaint potentially subject to judicial review.

The Court of Appeal came to the same conclusion but it considered that the lower court had focussed much too narrowly on the source of KPMG's power and instead should have taken a wider view of the regulatory position and the factual context relevant to the role of the Independent Reviewer.

Regulatory Position

In terms of the regulatory position, the Court of Appeal held that it was necessary to stand back and examine the function that was being fulfilled by KPMG in the overall scheme of things.

In examining that function, the court did not focus solely on the redress scheme but also on the background and reasons for the scheme and the FCA's role within that background.

Having done so, it considered that it involved too narrow a view of the FCA's statutory functions, and what it was trying to achieve, to say that the making AFR assessments was outside of the scheme of statutory regulation. However, in spite of this, it held that the main activity for agreeing compensation constituted the pursuit of private law rights.

Factual Context

Similar observations were made with regard to the factual context, which the Court of Appeal also thought should be viewed more widely. In this respect it noted that while there were similarities between this redress scheme and other industry-wide redress schemes, there were also some differences in that the FCA had imposed an obligation on Barclays to grant redress and had required it to appoint an Independent Reviewer. But it did not consider that the FCA's involvement in these matters changed the fundamental nature of the scheme which was essentially for the pursuit of private law rights.

That the scheme was for the pursuance of private law rights was also supported, the court reasoned, by other factors including that the FCA had not imposed any provisions with regard to processes for dealing with customer complaints relating to the skilled person and had not intended public law to be applicable to the Independent Reviewer's confirmation decisions.


The Court of Appeal confirms in its judgment that amenability to judicial review is a question of law. While this is inevitably right, it is recognised by the courts that "the criterion for amenability is very broad, not to say question begging" (per Dyson LJ (as he then was) in Hampshire County Council v Beer). 

It is therefore right to say that where a private body is tasked with undertaking functions which are, as the lower court put it, "woven into the fabric" of a regulatory authority's regulatory functions, it is necessary to consider the nature of the power and function that has been exercised in order to assess whether the decision has sufficient "public law flavour".

From the reasons given by the Court of Appeal for its conclusion, it would seem that the court's focus was skewed towards the nature of the scheme as the court interpreted it - namely it being a scheme for pursuit of private law rights - rather than the nature of the power and function being exercised by the Independent Reviewer.

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