The decision gives the FCA fresh legal cover to name firms under investigation. It may embolden the FCA to do so more readily in cases calling for the protection of consumers and investors (and it reveals senior-level views within the FCA favouring the naming of firms for that purpose). It also underscores the high bar for judicial intervention in this area. While the High Court will assess the FCA's interpretation of its own Enforcement Guide (ENFG), it will not readily substitute its own view for the FCA's expert evaluative assessments on exceptionality, desirability, and the form and timing of announcements.
The decision is a reminder that public disclosure of investigations can occur early and with limited notice. Preparedness and early engagement with the FCA about publicity remain essential.
FCA decides to announce investigation and identify firm
The FCA abandoned controversial proposals to "name and shame" firms under investigation in March 2025. It retained its existing narrower power in section 4.1 of ENFG (with some minor extensions to this power that are not centrally relevant here). Under this framework:
- The FCA "will not normally" announce an investigation.
- The FCA will publicly announce an investigation "in exceptional circumstances", if "desirable" to maintain public confidence in the UK financial system or market, protect consumers or investors, prevent widespread malpractice, help the FCA's investigation (for example, by encouraging witnesses to come forward) or maintain the smooth operation of the market.
- If announcing, the FCA may make an anonymised announcement disclosing the existence of an investigation but not the identity of the subject, or a naming announcement where the FCA identifies the subject. When considering whether to name a firm, the FCA must assess potential prejudice to the subject of the investigation and balance that against the relevant public interest objectives.
In this case, the FCA decided both to announce the investigation and to identify CPAL. That decision followed a two-stage internal process.
- The case team prepared an initial internal memorandum recommending to the decision-maker, Joint Executive Director of Enforcement and Market Oversight Therese Chambers, that there be an anonymised announcement.
- Therese Chambers responded internally with points that she considered merited consideration and had not featured or had been underplayed in the initial memorandum. These points related to CPAL itself and FCA concerns about its marketing, reach and claims. They included that a naming announcement could warn CPAL’s customers that they may wish to reconsider and withdraw rather than pay CPAL's fee.
- The case team then prepared a second memorandum recommending a naming announcement. Therese Chambers accepted this recommendation and the FCA communicated the decision to CPAL.
Judicial review of FCA's decision unsuccessful
The High Court granted permission for judicial review on all grounds but dismissed the claim. Part 1 of the judgment was published on 23 October 2025, preserving CPAL's anonymity and reporting restrictions because publicity would have defeated the purpose of the claim. CPAL applied for permission to appeal to the Court of Appeal but this was refused, following which Part 2 of the judgment (which had been finalised contemporaneously with Part 1) was published on 2 January 2026. It identified CPAL and provided more detailed reasoning for the court's decision.
The court held that there was no material misdirection in the FCA's interpretation of ENFG 4.1, and no unreasonableness in either its decision or reasoning.
Interpretation of Enforcement Guide
Courts are reluctant to interfere with the judgment of an expert regulator in its area of expertise. CPAL perhaps recognised that it would be difficult to challenge the FCA's judgment as to whether it was reasonable and appropriate to name CPAL. Instead, CPAL's primary ground of challenge was that the FCA's decision was unlawful on the basis that it misinterpreted the provisions of its own ENFG as to when an investigation should be announced and when the name of the firm under investigation should be disclosed.
The court rejected this ground. It held that the second memorandum did not mis-state the test. The second memorandum's reasoning was composite rather than sequenced (so could have been clearer) but it was not inherently flawed. Read as a whole, it identified and considered all alternatives and applied the exceptional circumstances framework without legal error.
In doing so the High Court confirmed the following interpretative points:
- "Exceptional" circumstances in this context are assessed against investigated situations rather than regulated situations more broadly. As the court put it: "You start with investigations. You ask whether this is an exceptional investigation. So, it would be a mistake to say: this is exceptional because it is so serious as to warrant investigation. That may make it an exceptional regulated-situation. It would not be an exceptional investigated-situation."
- The "desirability" of identifying a firm must be weighed against both alternatives: no announcement at all, or an anonymised announcement.
- To support a decision to identify a firm, the FCA must identify "exceptional circumstances" and "desirability" specifically relevant to whether to identify the firm, not just relevant to whether to make some form of announcement.
Reasonableness of FCA decision
The court also rejected CPAL's further ground of challenge and concluded that the FCA's decision was not unreasonable. It found that CPAL's challenge did not satisfy the well-recognised test: whether the FCA's decision fell outside the range of reasonable outcomes or disclosed a demonstrable flaw in its reasoning. This was despite "weaknesses" in the FCA's analysis, specifically no separation between the decision to announce and the decision to name CPAL.
The consumer protection imperative was, in the court's words, "fatal" to the reasonableness challenge. In particular, the court noted the following:
- The FCA assessed that announcement of the investigation and naming of CPAL "sooner and not later" was required. This would enable CPAL's customers to consider their positions in the light of how they came to be customers. These objectives outweighed the potential for prejudice to the firm.
- The FCA considered that an anonymised announcement would inadequately protect CPAL's customers because it would not inform them that the FCA was investigating their own provider. This would dilute the message and undermine the protective effect of the announcement. Similarly, reliance on firm-led customer letters, without confirmation that the FCA was investigating the firm, could leave customers "in the dark" and would lack the clarity or credibility of a regulator-led naming announcement.
- The High Court was not prepared to interfere with the FCA's judgment that naming CPAL was the most effective way to adequately inform customers and that this outweighed potential prejudice to the firm. It held that the FCA's judgment fell within the range of reasonable outcomes.
Decision insights
"Exceptional" and "desirable" are not platitudes, and consumer protection is key
While the court's judgment leaves latitude to the FCA, it does not create a general power to publicise investigations routinely. "Exceptional circumstances" and whether it is "desirable" to make a naming announcement are not mere formulaic labels. They require carefully weighing the features of each case, importantly considering potential prejudice to a firm.
Factors pointing towards exceptionality and desirability include immediacy and gravity of risk to consumers or markets, the inadequacy of less adverse alternatives to address that risk (such as anonymised announcements), and contemporaneous evidence that disclosure is genuinely necessary to achieve a proper regulatory purpose. Where risks are speculative, timing is not connected to a pressing regulatory need, or disclosure would be broad and indeterminate, the threshold is unlikely to be met; and mere convenience or reputational signalling would be unlikely to suffice on their own.
The FCA is likely to assert the consumer protection imperative in future decisions about whether to announce and whether to name a firm, given how decisively that disposed of the reasonableness challenge in this case.
Risk, opportunity and contingency planning
The decision sharpens both risk and opportunity.
Reputational and market impact risk is brought forward with the potential for disclosure about the fact of an investigation earlier in its lifecycle. Firms should plan their potential response as soon as it becomes clear that the FCA may open an investigation, in case the FCA decides to publicise the investigation and name the firm under investigation. Once the FCA opens an investigation, the firm should promptly seek clarity on whether the FCA intends to announce the fact of its investigation and identify the firm, test the necessity of any proposed announcement and propose less intrusive alternatives where appropriate to do so.
In terms of opportunity, early engagement with the FCA allows for advance preparation by firms and, where possible, timely challenge to any proposed announcement. Firms are likely to need to be able to move fast, as timeframes may be short: there is no prescribed minimum notice period, and in this case the FCA gave CPAL 24 hours' notice of the decision to name it as the subject of an investigation.
Even if the FCA does not identify a firm at the outset, it may do so later in the process. As a result, firms under investigation should maintain pre-emptive communications plans and draft announcements in anticipation of potential publicity before the conclusion of an investigation.
Open justice and anonymity
The court was willing to preserve CPAL's anonymity pending its decision and the exhaustion of rights to appeal, given that publicity would have defeated the object of the proceedings. It urgently made an order to prevent FCA publication, applied reporting restrictions, and conducted most of the hearing in private. The proceedings involved multiple applications over several months.
Judicial review and litigation risk
It is often difficult to succeed in a judicial review, and even more so to ask a court to assess decisions of expert regulators within their area of expertise. This makes it hard to challenge the FCA's assessment of "exceptional" circumstances and the "desirability" of naming a firm.
Instead, future challenges will likely be – as here – on the ground that the FCA has misdirected itself as to its own guidance (an error of law); and, in appropriate cases, improper purpose (for example, deterrence) or procedural unfairness. As demonstrated by this case, challenges to the substance of the FCA's judgment will be difficult unless there has been a clear material error of fact.
Open questions and future trajectory
Emboldened by this decision, the FCA may seek to make more naming announcements in future. The FCA has created a dedicated "Enforcement investigations" tag in its library of press releases for this purpose. As a result, we may see further challenges to FCA decisions to publicise firms under investigation, exploring case-by-case various points of interpretation of the FCA's guidance including:
- "Exceptional circumstances", particularly where market sensitivity is high and the urgency or need for consumer protection is contested.
- "Desirability" of anonymised announcements as an effective alternative to naming announcements with their associated reputational impact.
- "Potential prejudice", in particular reputational harm, where subsequent exoneration is possible.
- Listed firms in particular will press for pragmatism in the FCA's timing of its announcements given potential prejudice in the context of market disclosures.
Case:
R. (CIT) v Financial Conduct Authority (No.1) [2025] EWHC 2614 (Admin) (23 October 2025)
R. (Claims Protection Agency Ltd) v Financial Conduct Authority (No.2) [2025] EWHC 2615 (Admin) (2 January 2026)
This article was first published on 5 February 2026 in the Practical Law UK (PLC) website
