FCA ‘doesn’t need judicial permission to continue action against Carillion’

A High Court judge ruled today that the Financial Conduct Authority doesn’t need permission from an insolvency court to continue its regulatory action against failed construction company Carillion. Carillion was the largest trading liquidation in UK history when it collapsed in 2018 with debts of more than £7bn. It has been the subject of an FCA probe and, according to today’s judgment, has considered issuing statutory notices against Carillion and some of its directors relating to alleged market abuse and breaches of the Listing Rules. Lawyers representing Carillion, via the Official Receiver, argue that doing this under the Insolvency Act 1986 would be an “action or proceeding”  that requires the permission of the insolvency court. The case was heard by the Insolvency and Companies Court last year and the judge hearing it agreed. However, he gave the FCA permission to continue its action. The FCA appealed to clarify the legal situation. And in a long and detailed ruling, judge Mr Justice Michael Green today ruled the lower court was wrong, and the FCA doesn’t need permission from the insolvency court. The case centred on the Insolvency and Company Courts judge’s interpretation of “action or proceeding.” Green J today found that the interpretation used was too wide. The Financial Conduct Authority v Carillion Plc (In Liquidation) Business and Property Courts (Green J) 27 October 2021 Image © Tony Hall/REX/Shutterstock