England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
IN THE MATTTER OF AN APPLICATION FOR JUDICIAL REVIEW

		Royal Courts of Justice Strand, London, WC2A 2LL
		27th April 2004

INDEX

Number	Heading	Paragraph Number
1.	Introductory	1
2.	Lloyd's: (i) its status, powers and governance arrangements	4
3.	Lloyd's: (ii) the external regulatory regimes	7
4.	Lloyd's: (iii) its members, syndicates and managing agents: minority buy-outs	8
5.	The impugned decisions: Dr West's claims	12
6.	The obligations owed by Lloyd's to its members	15
7.	Lloyd's and judicial review: the Administrative Court decisions	17
8.	Lloyd's: the regulatory regime under FSMA	21
9.	Lloyd's and the exercise of power under the MST Byelaw: amenability tojudicial review	27
10.	Lloyd's and the exercise of power under the MST Byelaw: section 6(1) of the HRA	33
11.	Conclusion	40
12.	Transfer, retention in the Administrative Court, or a new start?	41

Lord Justice Brooke :

1. Introductory

1. On 23^rd December 2002 Dr Julian West issued a judicial review claim form in which he sought to impugn four decisions of the Business Conduct Committee ("BCC") of Lloyd's of London to approve four minority buy-outs of his memberships – or potential memberships – in four syndicates at Lloyd's. These decisions were made in October and November 2002. On 6^th May 2003 Dr West appeared in person before Keith J who refused him permission to apply for judicial review on the grounds that Lloyd's was not a public authority and that the decisions of one of its committees were not made in the exercise of a public function. On 3^rd October 2003 this court (Ward and Latham LJJ) granted him permission to apply for judicial review and directed that the question whether Lloyd's was amenable to judicial review, whether by virtue of section 6 of the Human Rights Act 1998 ("the HRA") or otherwise, in relation to its functions under scrutiny in this case, be reserved to this court and tried first.
2. The reason why the court took this unusual step was that there had been a series of cases in what is now the Administrative Court which upheld the proposition that Lloyd's did not operate in the public sphere, at any rate in relation to those of its functions that were under consideration in those cases, and although the coming into force of the HRA added a new dimension to the debate, it was thought inappropriate to remit the issue back to the Administrative Court in the light of the strong line of earlier authority at that level. This line of authority starts with R v Lloyd's of London ex p Briggs [1993] 1 Lloyd's Rep 176, and includes a judgment of mine (when sitting as a single judge of the High Court) in R v Council of Society of Lloyd's ex p Johnson (COT 16^th August 1996).
3. It needs to be stressed at the outset that this case is concerned only with the functions performed by the Council of Lloyd's and its committees when they are exercising regulatory powers in relation to the affairs of the members of Lloyd's and of other people, such as members' agents or managing agents of Lloyd's syndicates, who are involved in different aspects of the transaction of business at Lloyd's. It is not concerned with the exercise of disciplinary functions, nor with the exercise of regulatory functions for the protection of policy-holders.

2. Lloyd's: (i) its status, powers and governance arrangements

4. I will start by giving a brief outline of the issues we have to consider in the context of their historical and institutional setting. The Society of Lloyd's is an association of insurance underwriters. As a matter of legal form, it is a statutory corporation incorporated by a private Act of Parliament, the Lloyd's Act 1871. The underwriting of insurance business is carried on at Lloyd's by its members (otherwise known as "Names"). Lloyd's manages and superintends the Lloyd's insurance market.
5. Lloyd's powers are derived from a number of private Acts of Parliament (the Lloyd's Acts 1871-1982). Its objects, which are set out in section 10 of the 1871 Act, as amended by section 4 of the 1911 Act, are all of a commercial nature.
6. Lloyd's is now governed by the Council of Lloyd's ("the Council"). By section 6(1) of the Lloyd's Act 1982 ("the 1982 Act") the Council possesses the powers to regulate and direct the business of insurance at Lloyd's and to exercise all the powers of the Society. The Council acts through various committees. At the time of the decisions affecting Dr West these included the Lloyd's Regulatory Board, which acted through the BCC in relation to the matters in issue. Section 6(2)(a) of the 1982 Act gives the Council the power to make bye-laws, as appropriate.

3. Lloyd's: (ii) the external regulatory regimes

7. Lloyd's has long been subject to external regulation. At EU level Lloyd's is treated as an "insurance undertaking" for the purposes of insurance regulation, and as an "association of undertakings" for the purposes of competition law. At national level the principal statute governing the regulation of insurers in recent times was the Insurance Companies Act 1982, which gave the Department of Trade and Industry power to regulate the insurance market generally. Special provision was made by section 83 of that Act to regulate the conduct of insurance business by each individual member of Lloyd's. In practice, so long as members of Lloyd's complied with the quite limited requirements of that section, they would not be subject to the detailed monitoring requirements for insurance companies that are set out in Part II of that Act. Since 1^st December 2000, however, Lloyd's has been subjected to a far more extensive regulatory regime in which the prudential regulation of all insurance entities, including Lloyd's, is now exercised by the Financial Services Authority ("FSA") under the provisions of the Financial Services and Markets Act 2000 ("FSMA").

4. Lloyd's: (iii) its members, syndicates and managing agents: minority buy-outs

8. The underwriting syndicates at Lloyd's are composed of members of Lloyd's. They are managed by managing agents. The members can now be corporate or non-corporate. Membership of Lloyd's is entirely voluntary, and every member enters into a contract with Lloyd's which contains the following express obligations:

(a) Throughout the period of their membership, to comply with the provisions of the Lloyd's Acts 1871-1982, any subordinate legislation made or to be made thereunder, and any direction given or provision or requirement made or imposed by the Council or any person or body acting on its behalf;

(b) To become a party to, perform and observe all the terms and provisions of any agreements or other instruments as may be prescribed and notified to the Member or his underwriting agent by or under the authority of the Council.

It follows that Lloyd's byelaws are binding on each member in contract.

9. At the heart of the present dispute is the relationship between the members of a syndicate and the syndicate's managing agent. The extent of a member's right to participate in a syndicate is governed exclusively by the terms of his contract with the managing agent. Before 1994 the managing agent could simply terminate the agreement by notice expiring at the end of an underwriting year, but Lloyd's turbulent experiences in the late 1980s and early 1990s led not only to the introduction of corporate membership but also to the introduction of a new regime with effect from January 1995 whereby if a managing agent proposed to terminate a member's participation in a syndicate it was obliged to obtain the prior consent of the Council. The effect of this change was to give a member the right in certain circumstances to participate in the syndicate for the following year of account. A system of "auctions" of syndicate participations was also introduced by which members could "sell" that right.
10. The reforms at Lloyd's included the development of what became known as an integrated Lloyd's vehicle ("ILV"), being a single corporate member managed by an affiliated managing agent. In order to facilitate the growth of ILVs, Lloyd's created a framework by which a corporate member under common ownership with a syndicate's managing agent, might offer to acquire the participation of members of that syndicate. It also developed rules which obliged a member with more than 75% of a syndicate's capacity to make an offer to buy the capacity of the other members of the syndicate, and other rules which permitted minority buy-outs by managing agents or corporate members who acquired 90% or more of a syndicate's capacity.
11. The minority buy-out rules are contained in the Major Syndicate Transactions Byelaw ("the MST Byelaw"), which was approved by the Council in May 1997. Under this byelaw, a minority buy-out must be preceded by an offer (whether mandatory or voluntary). Where 50% or more of offerees have accepted the offer and the offeror and his associates hold at least 90% of the syndicate capacity, the MST Byelaw permits an offeror to buy-out the remaining minority, subject to the approval of the Council.

5. The impugned decisions: Dr West's claims

12. The decisions which Dr West seeks to impugn in these proceedings were made by the BCC pursuant to the MST Byelaw. By the first decision, made on 3^rd October 2002, the BCC gave final approval to a proposal by Catlin Underwriting Agencies Ltd, as managing agents of syndicate 1003, to terminate its contracts with syndicate members. By the second decision, made on 11^th October 2002, similar approval was given to a proposal by Amlin Underwriting Ltd in relation to syndicate 2001. Dr West was a member of both these syndicates.
13. The third and fourth decisions, made on 8^th November 2002, gave similar approval to a proposal by St Paul Syndicate Management Ltd in relation to syndicate 340 and to a proposal by Faraday Underwriting Ltd in relation to syndicate 435. Dr West had participated in an "auction" process in which the "right" to join these syndicates for the 2003 year of account was being "purchased" subject to the possibility of a minority buy-out. We were told by Mr Nardell, who appeared for Dr West, that his client knew that buy-out applications had been made when he placed his bid in these auctions.
14. In these proceedings Dr West complains that his share of syndicate capacity was purchased at an undervalue. He also complains about his lack of access to a right of appeal against the BCC's decisions, and his inability to sue the Council of Lloyd's for negligence unless it acted in bad faith (see section 14(3) of the 1982 Act). In these circumstances he wishes to invoke the provisions of Article 1 of the First Protocol and Articles 6 and 14 of the European Convention on Human Rights ("ECHR"). If Lloyd's was not exercising public functions in relation to these matters, these avenues of complaint will not be available to him. Hence the importance of the present application.

6. The obligations owed by Lloyd's to its members

15. In Society of Lloyd's v Clementson [1995] CLC 117 this court considered the nature of the obligations owed by Lloyd's to its members in relation to the regulation and direction of insurance business at Lloyd's. It concluded that the contract of membership contained no implied obligations on Lloyd's, although independent of contract a member might assert against Lloyd's obligations not to act unlawfully, ultra vires, for an improper purpose, or in bad faith. Furthermore a member might rely on EU law to impugn a decision of Lloyd's as an association of undertakings if an impugned decision might affect trade between member states and had as its object or effect the prevention, restriction or distortion of competition within the common market.
16. Dr West, however, asserts two more species of obligations: an obligation founded on public law which renders Lloyd's amenable to judicial review, and an obligation imposed on Lloyd's as a public authority by section 6(1) of the HRA.

7. Lloyd's and judicial review: the Administrative Court decisions

17. There have been, as I have said, a number of decisions of the Administrative Court in which it was said that the decisions impugned in those proceedings were not amenable to judicial review. In R v Lloyd's of London ex p Briggs [1993] 1 Lloyd's Rep 176 the Divisional Court was concerned with a case in which members of Lloyd's challenged the legal validity of cash calls made on them by the managing agents of their syndicates. The court's conclusions on the issues that are relevant in the present proceedings were set out crisply by Leggatt LJ at p 185:

"It does not help to refer to the respondents as regulators or to describe the system administered by the Corporation of Lloyd's as a regulatory regime as is done in the form 86 in these proceedings. The fact is that even if the Corporation of Lloyd's does perform public functions, for example, for the protection of policy holders, the rights relied on in these proceedings relate exclusively to the contract governing the relationship between Names and their members' agents. We do not consider that that involves public law. That is consonant with Mr Justice Saville's conclusion that a Name was not entitled to disregard a cash call made in good faith by the members' agents. We accordingly endorse [counsel's] submission that 'all of the powers which are the subject of complaint in the present application are exercised by Lloyd's over its members solely by virtue of the contractual agreement of the members of the Society to be bound by the decisions and directions of the Council and those acting on its behalf'.

Lloyd's is not a public law body which regulates the insurance market. As [counsel] remarked, the Department of Trade and Industry does that. Lloyd's operates within one section of the market. Its powers are derived from a private Act which does not extend to any persons in the insurance business other than those who wish to operate in the section of the market governed by Lloyd's and who, in order to do so, have to commit themselves by entering into the uniform contract prescribed by Lloyd's. In our judgment, neither the evidence nor the submissions in the case suggest that there is such a public law element about the relationship between Lloyd's and the Names as places it within the public domain and so renders it susceptible to judicial review."

18. That decision was followed by Pill J in R v Corporation of Lloyd's ex p Lorimer (COT 16^th December 1992, a case concerned with a public law challenge to a decision by the Lloyd's Members' Hardship Committee) and by myself in ex p Johnson (see para 2 above) which was a public law challenge to certain features of Lloyd's Renewal and Reconstruction Plan. I noted in my judgment that in R v Insurance Ombudsman Bureau ex p Aegon Life Assurance Ltd [1995] IRLR 101 Rose LJ, sitting in the Divisional Court, had said that he could see no basis for counsel's criticism of the judgment in Briggs. I also referred to the fact that Saville and Cresswell JJ (at first instance) and Sir Thomas Bingham MR, Steyn and Hoffmann LJJ (in this court) had all been involved in Society of Lloyd's v Clementson [1995] CLC 117 (see para 15 above), and none of them had apparently suggested that that dispute, which concerned the powers of Lloyd's in connection with claims to reimbursement of its Central Fund, belonged properly to the field of public rather than private law.
19. I went on to say (transcript pp 66-68):

"I am certainly willing to accept that in some contexts judicial review may be available even if the relationships in question are founded in contract, if the body whose actions are sought to be reviewed is performing a function that can properly be described as governmental, although the normal rule is that the express or implied terms of the agreement should govern the matter – see de Smith, Woolf and Jowell … at p 170 – but I am quite unable to see how this epithet 'governmental' can be ascribed to Lloyd's relationships with its members. As [counsel] observed, if the DTI was not satisfied with the Lloyd's system of self-regulation, the upshot would not be a situation in which Lloyd's would become a governmental regulatory authority, or one in which the DTI would regulate the way in which Lloyd's members were obliged to subscribe funds or to embark on reinsurance of old liabilities. The DTI would continue to be the authorising body, and it would be for it to decide what conditions it should impose on former Lloyd's underwriters before granting them authority to carry on insurance business if the blanket exemptions for members of Lloyd's no longer existed."

20. In Doll-Steinberg v Society of Lloyd's [2002] EWHC 419 (Admin), a case concerned with a decision of the Lloyd's Settlement Offer Panel, Stanley Burnton J, while regarding himself bound by the decision of the Divisional Court in Briggs, and finding himself unable to distinguish the functions of the Panel from the functions considered in Briggs (and even more obviously in Lorimer) said (at para 27):

"Indeed, quite apart from these authorities, I should have held that the function of the Panel is a private law function, and not a public function. The indebtedness of the claimant is a private law indebtedness: it relates to a reinsurance premium which she has been held liable to pay. The fact that the claimant's liability may have involved the exercise of powers conferred by statute does not affect the intrinsic nature of that liability. The function of the Panel is to consider the acceptance by Lloyd's of a lesser sum in settlement of that private law liability. I see no public law function involved in its decisions."

8. Lloyd's: the regulatory regime under FSMA

21. FSMA introduced a new regulatory regime, so far as Lloyd's was concerned. By section 19(1) of that Act, no person may carry on a regulated activity in the United Kingdom unless he is an "authorised person" or "an exempt person" (a concept which can be disregarded in the present context). It was not in issue that underwriting business conducted at Lloyd's is a regulated activity, as is apparent from section 315 of the Act, which provides, so far as is material:

"(1) The Society is an authorised person.

(2) The Society has permission to carry on a regulated activity of any of the following kinds:

(a) arranging deals in contracts of insurance written at Lloyd's ('the basic market activity');

(b) arranging deals in participation in Lloyd's syndicates ('the secondary market activity');

(c) an activity carried on in connection with, or for the purposes of, the basic or secondary market activity."

22. Section 315(4) has the effect of giving the FSA power to vary or cancel any of Lloyd's permissions, and by section 318(1) the FSA may give a direction to Lloyd's in order to achieve any objective specified by the FSA. Sections 316-7 give the FSA the power to give directions to a member or the members of Lloyd's collectively of the types described in those provisions. We were told that an insurance market direction has been given pursuant to section 316 which has the effect of providing that each member of Lloyd's is individually subject to the rules contained in a FSA handbook which relates to firms' complaint-handling processes.
23. We were also referred to S1 2001 No 544 which by regulation 56 identifies the relevant regulated function for a member's agent at Lloyd's ("advising a person to become, or continue or cease to be, a member of a particular Lloyd's syndicate") and by regulation 57 performs the same role in relation to a managing agent at Lloyd's ("managing the underwriting capacity of a Lloyd's syndicate as a managing agent at Lloyd's"). It is therefore apparent that as authorised persons within the meaning of FSMA Lloyd's underwriting agents are subject to the full scope of the supervisory and enforcement powers of the FSA which are set out in that statute, even if the FSA may leave it, at any rate for the time being, to the Council of Lloyd's to regulate Lloyd's underwriting agents.
24. It is unnecessary for the purposes of this judgment to describe in any greater detail other facets of the evolving relationship between the FSA and Lloyd's which are set out in paragraphs 54 to 67 of the witness statement of Mr Sean McGovern, who is a director and general counsel (legal services) at Lloyd's. A FSA Consultation Paper, issued in April 2003, explained the way in which the FSA proposed at that time to develop prudential requirements which would apply directly both to the Society of Lloyd's as a corporate entity and to Lloyd's managing agents.
25. The FSA has issued a document known as the "Lloyd's sourcebook" which forms part of the FSA Handbook. This sourcebook contains a number of material rules and requirements. They include solvency requirements at member level and the maintenance by Lloyd's of a prescribed level of "net central assets". The FSA and Lloyd's have also agreed a memorandum of understanding which relates to the operation of certain of their respective supervisory and enforcement functions. The purpose of this memorandum is to avoid duplication of effort, to ensure that there is efficient and effective supervision of underwriting agents, and to achieve close, co-operative and effective working relationships between the FSA and Lloyd's in their respective enforcement roles. A document published by the FSA and Lloyd's sets out in detail the arrangements that have been agreed for these purposes. It states in unequivocal terms (in para 3):

"Under the Financial Services and Markets Act 2000 (the Act'"), the FSA is the primary regulator for all financial services business in the UK. Its general duties and regulatory objectives are set out in sections 2 to 6 of the Act. It also has a general duty under section 314 of the Act with respect to the market at Lloyd's. It has concluded these arrangements for the reasons set out in paragraph 1 above. However, nothing in these arrangements can fetter its discretion with respect to carrying out its statutory duties and function."

26. All this evidence clearly shows that the FSA is now the statutory regulatory authority clothed with governmental powers in the area of Lloyd's business which is under scrutiny in this case.

9. Lloyd's and the exercise of power under the MST Byelaw: amenability to judicial review

27. Mr Nardell, who has appeared for Dr West in this court, submits, however, that notwithstanding the FSA's role, Lloyd's is itself performing a governmental function in these matters. It is therefore, he says, to be regarded as susceptible to judicial review in relation to the exercise of its functions under the MST Byelaw, and in the same context it must be regarded as a public authority within the meaning of section 6(1) of the HRA.
28. As is customary on these occasions, he took us back to R v Panel on Take-overs and Mergers, ex p Datafin plc [1987] QB 815. He argued that this case established that a body like Lloyd's, which is essentially private or non-governmental, will nevertheless be amenable to judicial review in respect of functions with a "public" element. In the same way that Government had in effect devolved on the Take-over Panel powers which it could ordinarily have been expected to retain for itself, so, he argued, Lloyd's were performing functions under its powers contained in the MST Byelaw which formed part of its regulation in the public interest of an important section of the UK insurance market.
29. It was an important, but not an essential, part of his submissions that Lloyd's derived its powers from an Act of Parliament. He encouraged us to read parts of the seminal reports by Sir Henry Fisher and Sir Patrick Neill QC which formed some of the catalysts for change in Lloyd's regulatory arrangements over the last 25 years. And while he referred us back in history to the enactment of the Lloyd's Act 1982 and the Insurance Companies Act 1982 (which largely excluded Lloyd's from the statutory regulatory regime it created), he submitted that the FSMA preserved the same regulatory pattern. While the FSA now possessed extensive reserve powers, Lloyd's was itself exercising regulatory powers for the protection of its members qua consumers of financial services which government would be exercising itself if Lloyd's fell short in the way it exercised its powers.
30. I cannot accept these submissions. The fact that Lloyd's corporate arrangements are underpinned by a private Act of Parliament and not by the Companies Acts makes it in no way unique and is certainly not dispositive of the matter. Mr Walker QC, who appeared for Lloyd's, told us that a number of insurance companies were incorporated by private Act of Parliament, and he showed us one such example. I am entirely satisfied that the line of cases at Divisional Court level which related to the private law status of Lloyd's in relation to functions such as are in issue in this case were correctly decided. The logic behind Leggatt LJ's approach in ex p Briggs (see para 17 above) is in my judgment unassailable. The coming into force of the FSMA, with its altogether more intrusive regulatory regime (so far as Lloyd's is concerned) makes the position even clearer, if greater clarity were required.
31. The decisions under challenge were concerned solely with the commercial relationship between Dr West and the relevant managing agents, and this was governed by the contracts into which he had chosen to enter. Those decisions were of a private, not a public, nature. They have consequences for Dr West in private, not public, law. For these tests, see R (Tucker) v National Crime Squad [2003] EWCA Civ 599 at [16]; [2003] ICR 599.
32. I intend no discourtesy to Mr Nardell if I do not refer to any more of his detailed submissions, all of which I have considered with care. It seems to me that the functions of Lloyd's which are under review in this case are totally different from the functions of the Takeover Panel that were under consideration in ex p Datafin. The Panel exercised regulatory control in a public sphere where governmental regulatory control was absent. This case is concerned with the working out of private contractual arrangements at Lloyd's which is itself subject to external governmental regulation.

10. Lloyd's and the exercise of power under the MST Byelaw: section 6(1) of the HRA

33. I turn therefore to Mr Nardell's submissions about the effect of section 6 of the HRA. That section provides, so far as is material, that:

"(1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right.

…

(3) In this section 'public authority' includes –

(b) Any person certain of whose functions are functions of a public nature …

…

(5) In relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private."

34. There have been two recent decisions of the Court of Appeal and one of the House of Lords which have shone light on the meaning of these provisions. In Poplar Housing Association Ltd v Donoghue [2001] EWCA Civ 595; [2002] QB 48 a local authority had transferred to the defendant housing association a substantial proportion of its housing stock, and the question arose whether the defendants were performing functions of a public and not a private, nature for the purposes of section 6 of the HRA. It is possible to derive the following principles from paragraphs 65 and 66 of the judgment of the court, given by Lord Woolf CJ:

(i) While section 6 of the Human Rights Act 1998 requires a generous interpretation of who is a public authority, it is clearly inspired by the approach developed by the courts in identifying the bodies and activities subject to judicial review;

(ii) The emphasis on public functions reflects the approach adopted in judicial review by the courts and textbooks since the decision of the Court of Appeal (the judgment of Lloyd LJ) in ex p Datafin plc (see para 28 above);

(iii) What can make an act, which would otherwise be private, public is a feature or a combination of features which impose a public character or stamp on the act;

(iv) Statutory authority for what is done can at least help to mark the act as being public: so can the extent of control over the function exercised by another body which is a public authority;

(v) The more closely the acts that could be of a private nature are enmeshed in the activities of a public body, the more likely they are to be public;

(vi) The fact that the acts are supervised by a public regulatory body does not necessarily indicate that they are of a public nature. (This is analogous to the position in judicial review, where a regulatory body may be deemed public, but the activities of the body which is regulated may be categorised private);

(vii) After identifying the most important factors in any given case, it is desirable to step back and look at the situation as a whole.

(viii) As is the position on applications for judicial review, there is no clear demarcation line which can be drawn between public and private bodies and functions. In a borderline case the decision is very much one of fact and degree.

35. In R (Heather) v Leonard Cheshire Foundation [2002] EWCA Civ 366; [2002] 2 All ER 936 this court was concerned with a case involving claimants to whom the local authority owed a duty to provide accommodation under section 21 of the National Assistance Act 1948. The authority performed that duty by making arrangements at public expense for the accommodation to be provided at a Leonard Cheshire home by the defendants, a private charitable foundation. When the foundation decided to close the home, the claimants maintained that it had been exercising functions "of a public nature" (see HRA s 6(3)(b) above) and was therefore amenable to a challenge on Convention grounds. The effect of paragraph 35 of the judgment of the court, given by Lord Woolf CJ, is accurately distilled in the summary contained in the headnote of the case:

(i) The role that the foundation was performing manifestly did not involve the performance of public functions;

(ii) The fact that it was a large and flourishing organisation did not change the nature of its activities from private to public.

(iii) While the degree of public funding of the activities of an otherwise private body was relevant to the nature of the functions performed, it was not by itself determinative of whether the functions were public or private.

(iv) The foundation was not standing in the shoes of the local authority. (Section 26 of the National Assistance Act 1948 provided statutory authority for the actions of the local authority, but provided the foundation with no powers);

(v) The foundation was not exercising statutory powers in performing functions for the claimants.

(vi) The fact that if the foundation were not performing a public function, the claimants would not be able to rely on ECHR Article 8 as against it could not change the appropriate classification of the foundation's function.

36. Finally, in Aston Cantlow PCC v Wallbank [2003] UKHL 37; [2003] 3 WLR 283 the House of Lords interpreted section 6 of the HRA for the first time. I take its main conclusions from the speeches of Lord Nicholls of Birkenhead (at paras 6 and 7), Lord Hope of Craighead (at para 52), Lord Hobhouse of Woodborough (at para 88) and Lord Rodger of Earlsferry (at para 171):

(i) The purpose of section 6(1) of the HRA is that those bodies for whose acts the state is answerable before the European Court of Human Rights ("ECtHR") shall in future be subject to a domestic law obligation not to act incompatibly with Convention rights (para 6):

(ii) Conformably with this purpose, the phrase "a public authority" in section 6(1) is essentially a reference to a body whose nature is governmental in the broad sense of that expression (paras 7, 88 and 117);

(iii) Although the domestic case-law on judicial review may provide some helpful assistance as to what does and what does not constitute a "function of a public authority" within the meaning of section 6(3)(b), this case-law must be examined in the light of the jurisprudence of the Strasbourg court as to those bodies which engage the responsibility of the State for the purposes of the Convention (para 52).

37. In that case the House drew support from the opinion of the European Commission on Human Rights in Hautanemi v Sweden (1996) 22 EHRR CD 155, and, more particularly, from the judgment of the ECtHR in Holy Monasteries v Greece (1994) 20 EHRR 1 at para 49 where the court said that the objectives of the monasteries – essentially ecclesiastical and spiritual ones, but also cultural and social ones in some cases – were not such as to enable them to be classed with governmental organisations established for public administration purposes.
38. The objectives of Lloyd's are wholly commercial. The nature of Lloyd's is not governmental, even in the broad sense of that expression. If any question arises as to the performance of any obligation on the part of the state to protect investors, it is the FSA which is the governmental organisation which will be answerable to the Strasbourg court, and not Lloyd's. The sixth of the principles identified by Lord Woolf in the Poplar case (see para 34 above) is particularly in point.
39. Although, as Lord Hope observed in the Aston Cantlow case, the caselaw on judicial review does not provide a conclusive answer to the applicability of section 6 of the HRA, there is nothing for Mr Nardell's comfort in any of the three decisions on the effect of that section to which I have referred in paras 34-36 above. It is the FSA which performs governmental functions in these matters, not Lloyd's. The fact that Lloyd's regulates its members' activities in the way it does as a result, in part, of its desire to avoid a more intrusive governmental regulatory regime cannot possibly convert it into a body exercising public functions itself within the meaning of Strasbourg caselaw.

11. Conclusion

40. For these reasons I have reached the same conclusion as Keith J (see para 1 above) and would make a declaration that Lloyd's is not amenable to judicial review, whether by virtue of section 6 of the HRA or otherwise, in relation to those of its functions that are under scrutiny in this case.

12. Transfer, retention in the Administrative Court, or a new start?

41. Finally, while I would usually be keen to transfer proceedings wrongly started as CPR Part 54 proceedings to the division of the court which handles private law actions of the relevant type, or to retain in the Administrative Court cases that might appropriately be retained there, I do not consider it to be practicable to take either of these courses in the present case. If Dr West wished to pursue a private law remedy against Lloyd's, those proceedings properly belong to the Chancery Division, and he must entirely reshape his case so as to identify the private law causes of action on which he intends to rely. Amendment simply is not practical here: he will have to begin again, if so advised.

Lord Justice Mummery:

42. I agree.

Lord Justice Dyson:

43. I also agree.