The CIT / TCPA litigation - Judicial analysis of "exceptional circumstances"
A recent challenge to a naming decision in the courts has thrown light on how the FCA approaches naming decisions, and on how the Court will scrutinise that decision-making in a judicial review challenge.
Part 1: The Judicial Review
In Part 1 (23 October 2025), the claimant challenged the FCA's proposed naming announcement by judicial review. The claimant contended that the FCA had materially misdirected itself in its interpretation of the Guide, or, alternatively, that the decision was unlawful as being unreasonable either in its outcome or in the reasoning process by which it was reached.
The High Court dismissed the substantive claim while preserving anonymity pending appeal.
A few key points arise from the court's analysis.
First exceptionality under ENFG 4.1.4G is assessed "relative to investigated-situations" not "relative to regulated-situations". The relevant comparator is the universe of FCA investigations, not the universe of regulated activity. As the Court explained, it would be a mistake to say that a case is exceptional simply because it is serious enough to warrant investigation. The question - with the clear baseline being that there is no publication of the fact of investigation - is whether it is an exceptional investigation, not merely an exceptional regulatory situation.
Second, seriousness alone does not render a case exceptional. A case may involve serious alleged misconduct and yet not justify naming. The FCA must identify features that distinguish the case from other serious investigations. In CIT, the Court recorded that the FCA relied, among other matters, on factors such as the number of customers potentially affected and the regulatory assessment of consumer protection risk. These matters were not treated in isolation but formed part of a composite evaluative exercise addressing desirability, exceptionality, and prejudice.
Third, the Court confirmed that the FCA must justify naming specifically, not merely publicity in general. As the Court accepted, the desirability assessment under ENFG 4.1.4G must be judged against both alternatives: no announcement, and an anonymised announcement. The FCA must be able to demonstrate that it has meaningfully considered whether anonymisation does give a genuine alternative path.
Given that this was a judicial review, the approach taken by the Court followed established principles of public law.
As the Court put it, the question was whether the FCA's decision was "outside the range of reasonable decisions open to [it]" or whether there was a demonstrable flaw in the reasoning process. The claimant therefore had to demonstrate either a material misinterpretation of the Guide or outcome unreasonableness or reasoning-process unreasonableness.
The Court rejected both limbs of challenge.
On interpretation, it found no material misdirection: when read fairly and as a whole, the record did not reflect any misunderstanding by the FCA of the Guide’s structure or of the need to justify naming against the relevant alternatives.
On reasonableness, the Court accepted that some aspects of the reasoning could be criticised - particularly when viewed specifically as justification for a naming announcement rather than an anonymised one. However, the reasoning was composite rather than sequenced; it did not separate rigidly the questions of whether to announce and whether to name. While a more segmented approach might have been clearer, its absence did not render the decision unlawful.
Crucially, the Court identified what it described as a dominant “key theme” in the FCA’s reasoning. That theme was the regulator’s assessment that only a naming announcement would effectively and promptly alert the firm’s customers to the existence of the investigation, thereby enabling them to consider their position. Alternatives - including anonymised publication or customer communications not disclosing the investigation - were considered but assessed as insufficient to achieve the same consumer protection objective. The Court described this evaluative regulatory judgment as “fatal” to the reasonableness challenge.
As one would expect with a public law challenge, the Court did not substitute its own view for that of the regulator. Assessments of desirability, exceptionality and prejudice were for the FCA, subject only to conventional reasonableness review by the court. The focus was on whether there had been a material misdirection or irrationality, not on whether the Court would have reached the same decision.
