UKSC 11
On appeal from:  EWCA Civ 954
The Financial Services Authority (a company limited by guarantee) (Respondent) v Sinaloa Gold plc and others (Respondents) and Barclays Bank plc (Appellant)
Lord Neuberger, President
JUDGMENT GIVEN ON
27 February 2013
Heard on 12 and 13 December 2012
Richard Handyside QC
(Instructed by Barclays Bank plc Legal Services)
Nicholas Vineall QC
(Instructed by the Financial Services Authority Legal Department)
LORD MANCE (with whom Lord Neuberger, Lady Hale, Lord Clarke and Lord Sumption agree)
"(1) The Applicant does not offer a cross-undertaking in damages.
(4) The Applicant will pay the reasonable costs of anyone other than the
Respondents which have been incurred as a result of this order including the costs of finding out whether that person holds any of the Respondent's assets and if the court later finds that this order has caused such person loss, and decides that such person should be compensated for that loss, the Applicant will comply with any order the court may make." (italics added)
By the time the injunction was continued, the possible inconsistency between paragraphs (1) and (4) was observed, and the FSA was required to agree to add at the end of paragraph (1) the phrase "save to the extent provided in paragraph (4) below", without prejudice to its right to apply to vary paragraph (4).
The FSA and FSMA
"(1) Neither the Authority nor any person who is, or is acting as, a member, officer or member of staff of the Authority is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of the Authority's functions.
(2) Neither the investigator appointed under paragraph 7 nor a person appointed to conduct an investigation on his behalf under paragraph 8(8) is to be liable in damages for anything done or omitted in the discharge, or purported discharge, of his functions in relation to the investigation of a complaint.
(3) Neither sub-paragraph (1) nor sub-paragraph (2) applies-
(a) if the act or omission is shown to have been in bad faith; or
(b) so as to prevent an award of damages made in respect of an act or omission on the ground that the act or omission was unlawful as a result of section 6(1) of the Human Rights Act 1998."
The present issue
"When . a statute provides that compliance with its provisions shall be enforceable by civil proceedings by the Crown for an injunction, and particularly if this is the only method of enforcement for which it provides, the Crown does owe a duty to the public at large to initiate proceedings to secure that the law is not flouted ."
Lord Diplock continued (p 364F-G):
"I agree therefore with all your Lordships that the practice of exacting an undertaking in damages from the Crown as a condition of the grant of an interlocutory injunction in this type of law enforcement action ought not to be applied as a matter of course, as it should be in actions between subject and subject, in relator actions, and in actions by the Crown to enforce or to protect its proprietary or contractual rights. On the contrary, the propriety of requiring such an undertaking from the Crown should be considered in the light of the particular circumstances of the case."
"So in this type of law enforcement action if the only defence is an attack on the validity of the statutory instrument sought to be enforced the ordinary position of the parties as respects the grant of interim injunctions is reversed. The duty of the Crown to see that the law declared by the statutory instrument is obeyed is not suspended by the commencement of proceedings in which the validity of the instrument is challenged. Prima facie the Crown is entitled as of right to an interim injunction to enforce obedience to it. To displace this right or to fetter it by the imposition of conditions it is for the defendant to show a strong prima facie case that the statutory instrument is ultra vires."
"Even where a strong prima facie case of invalidity has been shown upon the application for an interim injunction it may still be inappropriate for the court to impose as a condition of the grant of the injunction a requirement that the Crown should enter into the usual undertaking as to damages. For if the undertaking falls to be implemented, the cost of implementing it will be met from public funds raised by taxation and the interests of members of the public who are not parties to the action may be affected by it."
"as dismantling an old Crown privilege and substituting for it a principle upon which, in certain limited circumstances, the court has a discretion whether or not to require an undertaking in damages from the Crown as law enforcer."
In extending the principle to all public authorities, he said (p 274D-E):
"The principle appears to be related not to the Crown as such but to the Crown when performing a particular function. . [T]he considerations which persuaded this House to hold that there was a discretion whether or not to require an undertaking in damages from the Crown in a law enforcement action are equally applicable to cases in which some other public authority is charged with the enforcement of the law: see e.g. Lord Reid, at p. 341G, Lord Morris of Borth-y-Gest, at p. 352C, and Lord Cross of Chelsea, at p. 371B-G."
The present case
"Rather, it seems to me to be a clear pointer in the exercise of the discretion, which the court undoubtedly has, to indicate that no such cross-undertaking should be required where the designated agency is, in fact, seeking to discharge functions exercisable pursuant to a delegation under the 1986 Act. It seems to me that that is a matter which, in the exercise of my discretion, I should take into account in concluding that no cross-undertaking should be required."
It is unnecessary on this appeal to express any view on the correctness of treating paragraph 19 as a clear pointer in a context where that paragraph cannot ex hypothesi apply.