In the recent case of FCA -v- Grout [2018] EWCA Civ 71, the Court of Appeal confirmed the restrictive approach to third party rights pursuant to FCA notices previously laid down by the Supreme Court in Macris -v- FCA [2017] UKSC 19. We previously reported on the Macris decision on its way to the Supreme Court and following the judgment.


More often than not, when the FCA publishes an enforcement notice (warning or decision notices) detailing the case against the firm that it has been investigating which it proposes to fine and publically censure, it will often refer to the acts or omissions of directors, mangers, employers, contractors etc of that firm.

Where such individuals (i.e. third parties) are identified in an FCA notice and if,  in the FCA’s opinion, the reference may be regarded as prejudicial to that third party, the FCA must ensure that a copy of the notice is provided to that third party (sections 393 and 394 FSMA).

A third party who is entitled to receipt of a notice can thereafter make representations to the FCA and the Upper Tribunal with regard to the contents of the notice .

The case law

Both Grout and Macris arise out of an FCA notice issued against JP Morgan Chase, in respect of the collapse of a synthetic credit portfolio (“SCP“). Mr Grout was a trader and Mr Macris was  Chief Investment Officer at JP Morgan Chase.


In Macris, the Supreme Court determined that a third party seeking to prove that they have been ‘identified’ in a notice, must demonstrate that:

  1. their name, position or office is mentioned;
  2. they are the sole holder of that position or office (where a name is not mentioned); and
  3. reference by members of the public to freely and publically available sources of information would easily reveal the name of that individual by reference to their position of office.

Importantly, if a notice does not identify an individual by name, the reference must be synonymous with that individual. In other words, “it must be apparent from the notice itself that it could apply to only one person and that person must be identifiable from information which is either in the notice or publicly available elsewhere. However, resort to information publicly available elsewhere is permissible only where it enables one to interpret (as opposed to supplementing) the language of the notice” (Lord Sumption).


Mr Grout submitted that he had satisfied the Macris tests on the basis that:

  1. where the notice referred to “the traders on the SCP“, this was in actuality a reference to ‘each and every’ such trader, and consequently referred to Mr Grout;
  2. where the notice referred to the conduct of “one of the traders“, this was a reference to a single trader, which along with publicly available information, identified Mr Grout; and
  3. there were references in the notice to the mental states of individual traders which again, along with publicly available information, identified Mr Grout.

The Court of Appeal’s judgment

The Court of Appeal did not agree with Mr Grout and dismissed his appeal.

The Court found that the reference to “the traders on the SCP” was not a synonym for Mr Grout. Indeed, even the expressions “all the traders on the SCP” or “each and every trader“, would not have satisfied the test.

Additionally, the reference to “one of the traders“, was vague and better categorised as “anonymous” rather than synonymous. Moreover, this reference was in a section of the notice that was prejudicial to the Chief Information Officer rather than any trader.

The Court also decided that the reference to the mental state of various individuals was not sufficiently specific to identify a particular individual.

Consequently, as Mr Grout was not the only holder of the position of ‘trader’, there was no need to move to stage three of the Supreme Court’s test in Macris and consider information in the public domain.

But even if the Court had had cause to consider such information, it said that it was unlikely that the average member of the public would have recalled the details of relevant Financial Times articles published some months prior or the details of an investigation in America, and thus identified Mr Grout.


The test for engaging third party rights under FSMA is very narrow following Macris and now Grout.

On one view, it would be relatively easy for the FCA to word notices in such a way that does not engage third party rights. There may be future cases where, although the strict requirements of the Macris test have not been fulfilled, it is nevertheless (objectively and/or subjectively) implicit from the notice (and possibly public information) that a certain individual is being referred to. In such circumstances, will it be fair to prevent that individual from making representations based on the strict requirements of case law, or will we see a relaxation of the test in a way that the Courts do not presently appear ready to adopt?

Further, is it correct to pay regard only to the conclusions that an average member of the public may reach? In Grout, perhaps it was correct that “Joe public“, would have been unable to identify Mr Grout from the notice and information in the public domain. However, in a different case perhaps those within the industry and/or with an active interest in the industry would be more readily able to identify an individual based on the notice and public information. After all, it is the potentially adverse opinions of those within the industry (i.e. peers, future employers etc) that a potentially identifiable third party would likely have a strong desire to address.