LME consultation process considered by Court of Appeal

LME consultation process considered by Court of Appeal

Following the Court of Appeal’s decision in Rusal v LME, John Cooper, head of the public law and regulation team at Wragge Lawrence Graham & Co LLP, advises that future claimants will find little support in this case for potential challenges to the choice of subject matter in consultations.

Original news

R (on the application of United Company Rusal Plc) v London Metal Exchange [2014] EWCA Civ 1271, [2014] All ER (D) 104 (Oct)

The defendant, the London Metal Exchange (LME), decided, following a consultation process, to implement a new rule (the LILO rule) and excluded the possibility of a rent ban option. The claimant, United Company Rusal Plc (Rusal), sought judicial review. The judge held that, among other things, as the rent ban was the next best option, consultees had to know the reasons why it had been rejected in order properly to understand the LILO rule. The Court of Appeal, Civil Division, in allowing the defendant’s appeal, held that, among other things, the defendant had correctly disclosed the true reasons for the LILO rule and it had had no obligation to put forward a proposal which it was not willing to promote.

What is unusual about this case?

As the Court of Appeal recognised, this is a comparatively unusual example of a commercial body being subject to judicial review. The case should serve as a useful reminder that public law applies to all bodies exercising public functions, as the LME does in regulating its market, even where they are otherwise commercial entities with no statutory underpinning.

Why did Rusal raise a judicial review?

Rusal is a producer of various metals. The LME is the world’s premier market through which those metals are traded. The LME also regulates the warehouses in which metals traded through it are held.

After the start of the global recession in 2008, there was a fall in final demand for metals, but at the same

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