Court Denies ClientEarth's Challenge to FCA Approval of Ithaca Energy Prospectus

Citation: [2023] EWHC 3301 (Admin)
Judgment on


In the case of ClientEarth, R (on the application of) v Financial Conduct Authority ([2023] EWHC 3301 (Admin)), the claimant, ClientEarth, sought judicial review of the decision by the Financial Conduct Authority (FCA) to approve a prospectus by Ithaca Energy PLC. The claim centered on alleged failures in the prospectus to adequately disclose climate-related financial risks and the specificity of those risks associated with Ithaca’s securities. This legal synopsis will analyze the key topics discussed and the legal principles applied, directly referencing the pertinent portions of the case summary.

Key Facts

ClientEarth initiated the action against the FCA for approving a prospectus that they argued did not adequately disclose information about Ithaca’s assessment of climate-related financial risks as required under the EU Prospectus Regulation 2017/1129. They contended that this omission violated Article 16 concerning risk factors and Article 6 regarding necessary information for investors. Additionally, they argued the substantiality of their application, filing time, and their standing to pursue this claim on a public interest basis.

Promptness and Standing

The court first dealt with issues of delay and standing, acknowledging that the claim was filed at the end of the permissible three-month period but concluding this was not grounds alone to refuse permission ([2023] EWHC 3301 (Admin), § 5-6). As to standing, Mrs. Justice Lang DBE found that ClientEarth, with its environment-related expertise, had standing to pursue the claim on a public interest basis, consistent with precedent ([2023] EWHC 3301 (Admin), § 7).

Approval of Prospectus

Central to the case were questions about the FCA’s obligations under FSMA 2000 and its role in approving prospectuses ([2023] EWHC 3301 (Admin), § 8-9). Article 6.1 of the Prospectus Regulation outlines what a prospectus must contain, while Article 16.1 concerns risk factors. The court utilized case law to support the position that the FCA’s decision could only be challenged on public law grounds (R v Monopolies and Mergers Commission, ex parte South Yorkshire Transport Ltd [1993] 1 WLR 23; R (Ali) v Secretary of State for Justice [2013] 1 WLR 3536; R (Yukos Oil) v Financial Services Authority [2006] EWHC 2044 (Admin)) ([2023] EWHC 3301 (Admin), § 21).

The court distinguished ClientEarth’s case from R (Friends of the Earth) v SSBEIS [2023] 1 WLR 225 ([2023] EWHC 3301 (Admin), § 24) and affirmed the necessity of an evaluative judgment by the FCA, echoing the expertise of the regulator laid out in relevant case law.

Assessment of Risk and Rationality

The court found no requirement under Article 16(1) for issuers to disclose their assessment of materiality risk factors, nor did the ESMA Guidelines demand such ([2023] EWHC 3301 (Admin), § 22-23). Thus, the FCA’s decision did not misinterpret the law, nor was it irrational or unreasonable.

The court further addressed ClientEarth’s Ground 3, asserting that the FCA’s determination of what constitutes “necessary information” remained within the boundaries of rationality, as enshrined in the relevant Technical Note ([2023] EWHC 3301 (Admin), § 27-29).

Aarhus Convention Claim

On whether the claim was an Aarhus Convention claim, the court followed the principles laid out in the Venn and Lewis cases, as well as the Compliance Committee in ACCC.C.2013/85 and 86 (United Kingdom), to determine that the provisions challenged did not sufficiently relate to environmental law, thus declining to classify the claim under the Convention ([2023] EWHC 3301 (Admin), §§ 33, 35-47).


The court concluded that ClientEarth’s grounds were unarguable due to insufficient indication of any legal errors by the FCA. It determined that the FCA’s exercise of discretion in the matter was rational and fell within its expertise as a regulator. Thus, it denied permission to ClientEarth on all grounds for review.


In summary, the High Court provided a robust affirmation of the FCA’s discretion and expertise in the approval of a prospectus, emphasizing the evaluative judgment required in considering what information is necessary for investors. It reinforced the principle that challenges to such administrative decisions must demonstrate a clear error of law or irrationality. Furthermore, it narrowly interpreted the scope of environmental law in accordance with the Aarhus Convention

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