Upper Tribunal Tax and Chancery Chamber

[2025] UKUT 00185 (TCC)

Fecha: 09-Abr-2025

The Applicants’ position

The Applicants’ position

433.

The Applicants’ position was that those three alternatives were unreasonable, and that the Bank’s decision to use the existing basis was therefore the only reasonable option. In relation to the three possibilities, Mr Jaffey made the following submissions.

(1)

The Bank could not omit the RWA figure from its Q3 Update, because it had always been included, and leaving it out would have caused significant market disruption.

(2)

Had the Bank provided an estimate, this would have had to be adjusted again once Deloitte had done its work, in particular, to include the adjustment for the PBTL loans, and that too would have caused market disruption.

(3)

He described the third option as follows:

“explaining that the Bank had discovered an issue with its calculation of RWA and therefore the RWA figure in the Q3 Announcement was wrong (or might be wrong), even though the Bank was unable to quantify the extent of the error, had not yet completed work to ascertain the correct position and could therefore not confirm its capital position to the market. Such an unprecedented, unquantified and unclear announcement would likely have been catastrophic, as well as being unnecessary in law [and] would have had serious prudential consequences…”

434.

The Applicants also relied on Mr Arden’s evidence that:

“On 26 January 2023, I informally met with Mr Charles Woods of the PRA. Mr Woods was at the time of the Q3 Announcement (and remains) a Director of the PRA, holding the position of Head of UK Banks Supervision, and I understand is the person with overall responsibility for the prudential regulation of the Bank. At our meeting, I raised the FCA’s criticism that the Bank should have qualified its capital position in the Q3 Announcement. In response, Mr Woods audibly laughed and said that the PRA ‘would have had something to say about that’.”

435.

Mr Jaffey submitted that the Tribunal should make an adverse inference from the fact that the Authority had not called Mr Woods, and that “Mr Arden’s account is therefore undisputed. Mr Woods described the PRA’s position to Mr Arden accurately”.