Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT-2023-000064 - [2025] UKUT 00203 (TCC)

Fecha: 03-Abr-2025

Recklessness of approving the Statements

Recklessness of approving the Statements

Mr Staley’s position

452.

In order to determine this issue, we have to decide whether Mr Staley was aware of a risk that the Authority might be misled by the Statements. It is accepted that if Mr Staley is proven to have been aware of the risk, it was unreasonable for him to take that risk.

453.

This reflects the correct legal test for determining recklessness in cases of this kind, as referred to at [41] above. By way of reminder,what needs to be determined in relation to the allegation of recklessness made against Mr Staley in this case is (i) what facts in relation the matters on which the Authority relies Mr Staley was aware of and, in particular, whether he knew, when he approved the Letter, that its contents were factually inaccurate; (ii) whether in light of those facts, Mr Staley was aware that if he approved the statements in the Letter then the risk that the Authority would be misled by the statements in question would occur and; (iii) whether it was unreasonable in light of the circumstances as Mr Staley knew or believed them to be to take the risk in question.

454.

Mr Staley accepts that he and Mr Epstein had been professionally close for many years and that he had ceased all contact with Mr Epstein on or about 28 October 2015. His case is that notwithstanding his knowledge of those facts, he did not believe that the Statements were inaccurate because of what he, in common with Ms Wiggins, Mr Higgins and Mr Hoyt, believed to be the question that the Letter was answering.

455.

We have found that in his discussions with Barclays on the nature of the relationship between himself and Mr Epstein, Mr Staley “downplayed” the relationship, not revealing that it went beyond a professionally close relationship during the years that Mr Epstein was a client of the JPM Private Bank. In particular, Mr Staley gave the impression to Barclays that the two men were not personally close, and that they met infrequently after Mr Staley ceased to run the JPM Private Bank. Mr Smith submits that the mere fact that Mr Staley may have downplayed the relationship at times does not lead to the conclusion that the Letter contained factual inaccuracies. He submits that it is important to balance against that fact that Mr Staley was presented with a document which he did not draft, with a resulting unlikelihood that purely fortuitously, the draft served to further downplay his account of the relationship.

456.

Mr Smith’s submissions on the question of recklessness can be summarised as follows:

(1)

Mr Staley approved the final draft of the Letter after he had been told by Mr Hoyt that, in the light of the discussions that have taken place, it would meet the Authority’s needs.

(2)

Mr Staley questioned the inclusion of the “close relationship language” in the telephone phone call he had with Mr Hoyt on 7 October. That discussion influenced his decision to approve the draft as being fair and accurate.

(3)

Barclays was aware that Mr Staley had had a professionally close relationship with Mr Epstein.

(4)

The enquiry made by the Authority was not an enquiry into how Mr Staley or Barclays would define the relationship between Mr Staley and Mr Epstein, but whether Mr Staley had knowledge of or involvement in Mr Epstein’s offending and the draft accurately answered that question. The final paragraph of the Letter made that clear.

(5)

Mr Staley was not being asked to provide details of the history and nature of his relationship with Mr Epstein. In that regard, he was working from his memory and was not being asked what he remembered of the email exchanges with Mr Epstein which subsequently came to light.

(6)

If the Letter was inaccurate, it would obviously appear to be inaccurate to everyone else at Barclays involved in its preparation.

(7)

Mr Staley did not draft the Letter, nor did he choose the wording. He was reasonably entitled to believe, and did believe, that the Letter was drafted with the intention of serving the purpose of providing the Authority with an accurate answer to its enquiry, which was whether Barclays was satisfied that there had been no impropriety in the relationship between Mr Staley and Mr Epstein. Mr Hoyt, with the assistance of Mr Higgins, drafted the Letter with that purpose in mind. The Letter reflected the fact that Mr Staley’s relationship with Mr Epstein was such that he was not involved in, nor would he have been aware of, the misconduct which had resulted in Mr Epstein’s arrest and which had given rise to the attendant publicity which generated the Authority’s enquiry, and that Barclays was satisfied as a result of discussions that had been conducted with Mr Staley.

(8)

The Authority’s case fails to engage with the details of the relationship which were already in the public domain by the time the Letter was provided and which form part of the context. Its focus, in presenting its case, has been on one issue, namely that the email correspondence shows that Mr Staley had a “close” relationship with Mr Epstein and that his last contact with Mr Epstein was not “well before” he joined Barclays in 2015. In doing so, the Authority relies on an “apparent disjunction” between the email correspondence and the terms of the Letter without confronting the central question of why the Letter was drafted, approved and signed in these terms. That can only be done by examining the factual context in which the Authority’s enquiry took place and what it was believed by Mr Hoyt, Mr Higgins and Mr Staley the Letter was responding to.

(9)

The Authority’s case is based on the flawed logic that purely fortuitously, Mr Staley was presented with an opportunity by Mr Hoyt, in the form of the draft Letter on 6 and 7 October 2019, which Mr Staley had not drafted, to mislead the Authority. For that to hold good it would mean that Mr Staley questioned Mr Hoyt during a telephone conversation on 7 October as to the accuracy of the drafting, but nonetheless was prepared to take advantage of this fortuitous error of which he was aware. Making that enquiry of Mr Hoyt would be inconsistent with someone who was seeking to take advantage of an opportunity which had presented itself fortuitously and which was now seen by Mr Staley as an opportunity which could somehow be exploited by approving the draft.