FCA’s exercise of criminal powers successfully challenged by judicial review
In a judgment dated 10 March 2026 the subject of a criminal investigation by the Financial Conduct Authority (“FCA”) successfully challenged a search warrant obtained by the Metropolitan Police on behalf of the FCA.
Although the Court denied the claimant’s application for the return of seized items and a bar on the use of any information obtained from the unlawful search (a separate process in the Crown Court will determine those issues), the criticisms made of the FCA in the judgment are significant, both in respect of its application for the warrant, where it made errors of law, and its pre-action conduct in withholding disclosure and threatening the claimant with costs.
The judgment can be found here: R (GSX) v The Crown Court at Southwark [2026] EWHC 538 (Admin)
Criticism of the FCA
It is important to note that the Court found the FCA did not act in bad faith, and that it acted in reliance on counsel’s advice in relation to the warrant application and that it was reasonable for them to do so.
However, the Court did make several impactful criticisms of the FCA’s conduct, in applying for the warrant and after.
1. Errors of law in the warrant application
The FCA made significant errors of law in relation to the warrant application, including applying under the wrong statutory provision and failing to properly tailor the application to the legal framework used.
“The drafting of the application had started on the basis it was to be made under s.176 of FSMA. Once internal discussions had identified that it should be a PACE application, the wording from the original draft was transposed onto a template for a s.8 application. That was unfortunate as it meant the application was not properly tailored to the section under which it was made.” (paragraph 58 of the judgment)
2. Failure to adequately scrutinise the sensitive information form (“SIF”)
The FCA placed the SIF before the judge without proper analysis of its purpose or relevance, risking giving a misleading impression of the claimant’s alleged involvement in other possible wrongdoing.
“Although bad faith is not alleged, I do not consider that the FCA took sufficient care in their approach to the SIF. Had they properly examined the relevance of the information contained in it, they would on their own case have concluded that it was not relevant and therefore that it should not be included. As it was, a potentially misleading impression was created by putting this information forward without any attempt to clarify that it was not intended to be an allegation of other possible wrongdoing.” (para 77)
3. Handling of the SIF disclosure
The FCA failed to seek judicial approval to withhold the SIF and maintained that it was irrelevant, displaying a lack of proper care and failing to appreciate that it was for the court, not the FCA, to determine relevance.
“The interested parties did not seek judicial approval to withhold the SIF, despite HHJ Baumgartner’s clear reminder that it was for the court to decide what material can be released and what cannot. Instead, the claimant’s solicitor was discouraged from seeking disclosure, under threat of costs, without her knowing the gist of its contents.” (para 85)
4. Lack of rigour and proper care
The FCA’s shortcomings around the SIF were serious, falling short of the standards expected of a public authority exercising intrusive investigative powers. Their failings represented a lack of rigour rather than deliberate misconduct.
“The FCA’s shortcomings around the SIF are serious. However, they fall short of the “egregious disregard” for statutory safeguards described in Chatwani. The FCA did not act in bad faith. Their failings represent a lack of rigour rather than any deliberate misconduct.” (paras 93; 96)
5. Delay and “stubbornness” in disclosure
The FCA displayed “stubbornness” and unnecessary delay in disclosing material, particularly the SIF, and failed to follow clear principles regarding disclosure obligations.
“There was a failure to follow the clear principle set out in Golfrate that it is impermissible to withhold material placed before the judge without the sanction of the court. Thereafter, the FCA displayed a stubbornness around the issue. It is to be remembered that any difficulty surrounding disclosure of the SIF was created by their decision to place it before the judge without proper analysis of why they were doing so. Their attempts to retrospectively explain the information in the SIF through Mr Parkinson’s second statement were not helpful. The way in which Mr Parkinson described what was in the SIF was not consistent with what I have described as the natural reading, although I do not regard that as a deliberate attempt to conceal the true position.” (para 88)
Comment
The FCA has widely publicised the fact that it is bringing more criminal cases than ever, including outside the regulatory perimeter. The investigation with which this judgment is concerned provides another example of the FCA investigating crime broadly: the judgment reveals that the claimant in this case is a practising barrister, under investigation for conspiracy to defraud by false representation and also offences under FSMA.
The FCA’s actions were found to be “flawed, and in certain respects seriously flawed” but “they did not amount to bad faith or egregious disregard for constitutional safeguards” (para 99). Nothing in the judgment suggests a reckless or careless approach to legal professional privilege was taken by the FCA in the application for the warrant or conduct of the search.
The judgment in the judicial review proceedings provides a reminder of the importance of procedural safeguards in criminal investigations and the rights of those under investigation to challenge, and to receive fulsome and timely disclosure, when it is claimed that those safeguards have not been strictly applied. However, while procedural safeguards are robust, the courts will not allow them to be used as a shield against legitimate investigation where there is no evidence of bad faith or egregious disregard for the law.
