Which of the following correctly states the test for permission to appeal a First-tier Tribunal decision? I don’t think it can be both.
In the recent Upper Tribunal judgement in AC v Cornwall Partnership NHS Foundation Trust  MHLO 1 (UT), the judge says:
In order to give the Applicant permission to appeal to the Upper Tribunal, I must find that the proposed grounds of appeal are arguable, in the sense that there is a realistic prospect of success in showing that the First-tier Tribunal went wrong in law in some way. However, for the reasons that follow, and despite the best efforts of Mr Schymyck to persuade me otherwise, I am not satisfied that there is any such arguable error of law in the First-tier Tribunal’s decision. (emphasis in original)
But here is a quotation from Lord Woolf in Smith v Cosworth Casting Processes Ltd  EWCA Civ 1099, which has been quoted in earlier Upper Tribunal cases.
The guidance is as follows:
The court will only refuse leave if satisfied that the applicant has no realistic prospect of succeeding on the appeal. This test is not meant to be any different from that which is sometimes used, which is that the applicant has no arguable case. Why however this court has decided to adopt the former phrase is because the use of the word ‘realistic’ makes it clear that a fanciful prospect or an unrealistic argument is not sufficient.
The court can grant the application even if it is not so satisfied. There can be many reasons for granting leave even if the court is not satisfied that the appeal has any prospect of success. For example, the issue may be one which the court considers should in the public interest be examined by this court or, to be more specific, this court may take the view that the case raises an issue where the law requires clarifying. (emphasis in original)