Are Express Statutory Powers Needed For A Regulator To Make An Intrusive Regulatory Decision?

The High Court has favoured a broad interpretation of general powers given to a regulator in dismissing a challenge to a decision concerning the imposition of fee caps: Visa, Mastercard and Revolut v Payment Systems Regulator [2026] EWHC 64 (Admin). In doing so, the court addressed some commonly used statutory interpretation arguments regarding when explicit statutory language is needed for an intrusive exercise of regulatory power.

Key Points

• The starting point will be to rely on the literal interpretation of a statutory provision, meaning where it is worded very generally and broadly, it may be difficult to persuade a court that some limitation was intended.
• There is no general rule of construction that where a power is referred to expressly in one statutory provision, it cannot also exist in a different part of the statute, in a different context, even though it is not spelt out expressly. The application of the principle that the general gives way to the specific depends on the facts and statutory context.
• There is nothing unusual about the exercise of intrusive powers by a public authority being subject to challenge only by way of judicial review. The lack of a merits appeal route does not lead to the conclusion that there was no intention for a regulator to be able to exercise intrusive powers.

Background

The court dealt with three separate claims for judicial review together as they raised similar and overlapping issues. The judicial reviews were found to be arguable such that permission was granted, but were ultimately dismissed.

The central issue was whether the Payment Systems Regulator (PSR) has the power, pursuant to s.54 of the Financial Services (Banking Reform) Act 2013 (FSBRA), to give a general direction which has the effect of imposing caps on a type of fee that can be set for a certain category of transactions.

S.54 FSBRA states simply that the PSR may give directions in writing to participants in regulated payment systems, and that such a direction may (a) require or prohibit the taking of specified action in relation to the system; (b) set standards to be met in relation to the system. It goes on to specify that a direction may apply generally, or to specified entities or categories of entity.

The statutory objectives of the PSR in FSBRA are to advance competition and innovation and to ensure that payment systems are operated and developed in the interests of the people and businesses that use them.

The PSR has two broad sets of powers under FSBRA:

1. Regulatory powers in relation to "regulated payment systems", as defined in FSBRA; and
2. Competition powers which are concurrent with some of the powers of the Competition and Markets Authority (CMA). For example, the PSR has power to carry out market studies, and, if necessary, make a market investigation reference to the CMA, but not to carry out market investigations, or to order enforcement measures itself since these are the responsibility of the CMA.

Statutory interpretation arguments

The claimants accepted that, read in isolation and given a literal meaning, s.54 FSBRA could be interpreted as giving the PSR a power to give a general direction imposing the relevant price cap.

However, they argued that the modern approach to interpretation requires the court to look at the context and purpose of the provision, which they submitted made it clear that attempting to use s.54 to impose the price caps was ultra vires, for various reasons including the following:

• They contended that the words used in s.54 demonstrated that it was about the operation of the system, rather than being aimed at specific actions such as price caps.
• Based on what were described as "well recognised principles of statutory interpretation" including that the general gives way to the specific, the claimants pointed to references to price capping and other specific powers in other provisions in FSBRA, which they said showed that where Parliament intended to grant an intrusive power, and particularly where it intended to grant a power to control and cap fees and charges, it said so explicitly. In such a carefully drawn statutory scheme it was not accidental that intrusive powers such as regulating fees and charges are made explicit and limited to certain circumstances.
• Similarly the claimants relied on the fact that where PSR's powers were particularly intrusive, a merits appeal route was provided, whereas no equivalent appeal route applied to s.54, meaning the more limited grounds of judicial review are the only route of challenge.
• At a broader level the claimants sought to reassure the court that there would be no "regulatory gap" if the PSR did not have power to price cap under s.54 because there were other routes within FSBRA for the PSR to use if there were concerns about pricing levels and competition, and there were the separate (and partially overlapping) powers of the CMA.

Judgment

Cavanagh J was not persuaded by any of these arguments. He reiterated that his role was to discern the intention of Parliament, as expressed in the language of the statute. The focus must therefore be on the words of the relevant statutory provision, read in context with the statutory scheme set out in the wider group of sections, and in the historical context in which the statute was enacted. The latter is relevant in so far as it sheds light upon the statutory purpose and the mischief that the provision was intended by Parliament to address.

If the words produce a meaning, against that background, that is clear and unambiguous, then secondary, external, materials cannot displace that meaning. However, secondary materials may place the statutory language in context and may help to resolve ambiguity and uncertainty, or bring ambiguity and uncertainty to light.

The starting point was therefore the literal interpretation of s.54, which the claimant had accepted could be read to include the relevant power. There was no reference in the wording to "operational" as a limit to the powers in that section and therefore nothing to justify distinguishing between operational matters and pricing matters. Once it was clear that the literal interpretation favoured the PSR, the claimant faced an uphill struggle in trying to change that meaning by looking at the context, purpose and extraneous materials.

The court accepted that the PSR was seeking to advance its service-user and competition objectives in deciding to impose price caps. Therefore, the PSR was trying to use the power in support of the objectives it was set by Parliament, i.e. in accordance with the legislative intention. The relevance of the statutory objectives here was not to widen the power granted, but to support and confirm the literal interpretation of s. 54. Although there were other ways the PSR could use its powers to address the relevant concerns, that did not limit what it could do under s.54. In particular, Parliament did not say that the power to give general directions for competition purposes was in any way limited by the availability of concurrent competition powers.

Although other parts of FSBRA made express references to powers concerning fees and charges, those were said to be completely different in their purpose, e.g. where the PSR had a dispute resolution role. They were not dealing with the same situation. There was therefore nothing illogical or inconsistent in the power to vary fees and charges being spelt out elsewhere but not in s.54. Whilst there are common principles, such as that the general gives way to the specific, their application depends on the facts and context of each piece of legislation. Cavanagh J accepted the PSR's submission that there is no general rule of construction that where a power is referred to expressly in one statutory provision, it cannot also exist in a different part of the statute, in a different context, even though it is not spelt out expressly.

The appeal rights argument was similarly rejected, with the court noting there is nothing unusual about the exercise of intrusive powers by a public authority being subject to challenge only by way of judicial review – in fact that is the norm. It is perfectly logical for Parliament to decide that the exercise by a statutory regulatory body of its general regulatory powers should be subject to challenge by way of judicial review, rather than by way of an appeal to the CMA or the Competition Appeal Tribunal (CAT). There would be no reason to think that the CMA or CAT is better placed to rule on the rights and wrongs of general regulatory decisions than the Administrative Court.

Given the court's view that the meaning of s.54 was clear and unambiguous, considering any external materials would not be able to change that interpretation. In any event the court did not consider those materials to suggest a different meaning.

Further, the court concluded that the claimant's interpretation of s.54 would result in a regulatory gap, because it would not be able to react nimbly and speedily but would instead have to wait for the CMA.

Comment

Although this judgment looks at one particular piece of legislation, the arguments about statutory interpretation are ones that will be relevant across most regulatory sectors and statutory schemes.

With a trend towards legislation being drafted using broad general language, this judgment is notable for concluding that express powers were not needed for intrusive regulatory action, even where other parts of the legislation explicitly authorised actions on related subjects. Ultimately however the starting point remains that all questions of statutory interpretation will turn on the content of the specific legislation.

Interestingly, on a similar theme, recent decisions have also emphasised the limitations of the principle of legality (where express words are required to interfere with fundamental rights). Taken together these developments highlight the need for a careful focus on the objective and/or literal interpretation of the actual language of statutory provisions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.