In an unreported permission decision, the High Court held that there was an arguable case that KPMG could be subject to an application for judicial review in relation to its actions as independent assessor in a scheme set up by the Financial Conduct Authority.
H applied for permission to bring an application for judicial review against KPMG in a case relating to the mis-selling of interest rate swap products. The Financial Conduct Authority oversaw a redress scheme set up by banks to compensate companies that had been mis-sold interest rate hedging products. As part of the scheme, it appointed independent reviewers to provide skilled persons reports under s.166 of the Financial Services and Markets Act 2000. It appointed KPMG to act as the independent reviewer in respect of the redress scheme operated by Barclays. KPMG is a private company and one of the world's 'Big Four' accountancy firms. H was awarded compensation under the scheme, though it was not compensated for consequential losses. KPMG concluded that the redress that the bank had offered was appropriate, fair and reasonable. H sought judicial review of that decision on the basis that KPMG followed a procedurally unfair process.
The court held that there was an arguable case that even though it is not a public body, KPMG is amenable to judicial review in the present case, since its role in acting as the independent reviewer was to ensure that any redress provided fair and reasonable compensation. It held that this might give the arrangements a sufficient public law flavour which would make them amenable to judicial review, and it was satisfied that H had put forward sufficient grounds for arguing that the quality of KPMG's review had not met public law standards. In addition, the matter is clearly one of very considerable public interest, and this (although not determinative) was a factor that supported the claimant's application.
Although details of the decisions are currently scant, it appears to be a potentially interesting development of the principle in R (Datafin) v Panel on takeovers & Mergers  Q.B. 815 that the decisions of a private body exercising public functions may be amenable to judicial review. The majority of cases brought on this basis focus on the nature and the functions of the body itself (see e.g. R (Aga Khan) v Disciplinary Committee of the Jockey Club  1 W.L.R 909). However, the court's decision in the present case may better reflect that in R (G) v Cobham Hall School  E.L.R 389, which held that a statutory underpinning of a relevant function of a private body (in that case an independent school participating in the assisted places scheme under the Education Act 1996) may result in the exercise of those functions being amenable to judicial review, even where the other functions of that body derive only from private law.
It is not yet clear when the substantive hearing of the case will take place but we will keep a close eye on the court's decision. While a substantive finding that KPMG is amenable to judicial review in relation to its actions as independent reviewer would not amount to a change as substantial as that represented by Datafin, it would have the potential to expand the range of individuals and bodies whose actions may be the subject of applications for judicial review.