“7. Communications with clients A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. 8. Conflicts of Interest A firm must manage conflicts of interest fairly both between itself and its customers and between a customer and another client.”
“A requirement may refer to the past conduct of the person concerned (for example, by requiring the person concerned to review or take remedial action in respect of past conduct).”
“404A Rules under s.404: supplementary (1) Rules under section 404 may make provision— (a) specifying the activities and requirements in relation to which relevant firms are to carry out investigations under consumer redress schemes; (b) setting out, in relation to any specified description of case, examples of things done, or omitted to be done, that are to be regarded as constituting a failure to comply with a requirement; (c) setting out, in relation to any specified description of case, matters to be taken into account, or steps to be taken, by relevant firms for the purpose of— (i) assessing evidence as to a failure to comply with a requirement; or (ii) determining whether such a failure has caused (or may cause) loss or damage to consumers; (d) as to the kinds of redress that are, or are not, to be made to consumers in specified descriptions of case and the way in which redress is to be determined in specified descriptions of case; (e) as to the things that relevant firms are, or are not, to do in establishing and operating consumer redress schemes; (f) securing that relevant firms are not required to investigate anything occurring after a specified date; (g) specifying the times by which anything required to be done under any consumer redress scheme is to be done; (h) requiring relevant firms to provide information to the FCA; (i) authorising one or more competent persons to do anything for the purposes of, or in connection with, the establishment or operation of any consumer redress scheme; (j) for the nomination or approval by the FCA of persons authorised under paragraph (i); (k) as to the circumstances in which, instead of a relevant firm, the FCA (or one or more competent persons acting on the FCA’s behalf) may carry out the investigation and take the other relevant steps under any consumer redress scheme; (l) as to the powers to be available to those carrying out an investigation by virtue of paragraph (k); (m) as to the enforcement of any redress (for example, in the case of a money award, as a debt owed by a relevant firm). (a) specifying the activities and requirements in relation to which relevant firms are to carry out investigations under consumer redress schemes; (b) setting out, in relation to any specified description of case, examples of things done, or omitted to be done, that are to be regarded as constituting a failure to comply with a requirement; (c) setting out, in relation to any specified description of case, matters to be taken into account, or steps to be taken, by relevant firms for the purpose of— (i) assessing evidence as to a failure to comply with a requirement; or (ii) determining whether such a failure has caused (or may cause) loss or damage to consumers; (d) as to the kinds of redress that are, or are not, to be made to consumers in specified descriptions of case and the way in which redress is to be determined in specified descriptions of case; (e) as to the things that relevant firms are, or are not, to do in establishing and operating consumer redress schemes; (f) securing that relevant firms are not required to investigate anything occurring after a specified date; (g) specifying the times by which anything required to be done under any consumer redress scheme is to be done; (h) requiring relevant firms to provide information to the FCA; (i) authorising one or more competent persons to do anything for the purposes of, or in connection with, the establishment or operation of any consumer redress scheme; (j) for the nomination or approval by the FCA of persons authorised under paragraph (i); (k) as to the circumstances in which, instead of a relevant firm, the FCA (or one or more competent persons acting on the FCA’s behalf) may carry out the investigation and take the other relevant steps under any consumer redress scheme; (l) as to the powers to be available to those carrying out an investigation by virtue of paragraph (k); (m) as to the enforcement of any redress (for example, in the case of a money award, as a debt owed by a relevant firm). (2) The only examples that may be set out in the rules as a result of subsection (1)(b) are examples of things done, or omitted to be done, that have been, or would be, held by a court or tribunal to constitute a failure to comply with a requirement. (3) Matters may not be set out in the rules as a result of subsection (1)(c) if they have not been, or would not be, taken into account by a court or tribunal for the purpose mentioned there. (4) The FCA must exercise the power conferred as a result of subsection (1)(d) so as to secure that, in relation to any description of case, the only kinds of redress to be made are those which it considers to be just in relation to that description of case. (5) In acting under subsection (4), the FCA must have regard (among other things) to the nature and extent of the losses or damage in question. (6) The provision that may be made under subsection (1)(h) includes provision applying (with or without modifications)— (a) any provision of section 165; or (b) any provision of Part 11 relating to that section. (7) The reference in subsection (1)(k) to the other relevant steps under any consumer redress scheme is a reference to the FCA making the determinations mentioned in section 404(6) and (7) (with the firm still required to make the redress). (8) If the rules include provision under subsection (1)(k), they must also include provision for— (a) giving warning and decision notices, and (b) conferring rights on relevant firms to refer matters to the Tribunal, in relation to any determination mentioned in section 404(6) and (7) made by the FCA. (9) Nothing in this section is to be taken as limiting the power conferred by section 404.”
“404F Other definitions etc (1) For the purposes of sections 404 to 404B— “redress” includes— (a) interest; and (b) a remedy or relief which could not be awarded in legal proceedings; “specified” means specified in rules made under section 404. (2) In determining for the purposes of those sections whether an authorised person has failed to comply with a requirement, anything which an appointed representative has done or omitted as respects business for which the authorised person has accepted responsibility is to be treated as having been done or omitted by the authorised person. (3) References in those sections to the failure by a relevant firm to comply with a requirement applicable to the carrying on by it of any activity include anything done, or omitted to be done, by it in carrying on the activity— (a) which is in breach of a duty or other obligation, prohibition or restriction; or (b) which otherwise gives rise to the availability of a remedy or relief in legal proceedings. (4) It does not matter whether— (a) the duty or other obligation, prohibition or restriction, or (b) the remedy or relief, arises as a result of any provision made by or under this or any other Act, a rule of law or otherwise. (5) References in sections 404 to 404B to a relevant firm include— (a) a person who was at any time a relevant firm but has subsequently ceased to be one; and (b) a person who has assumed a liability (including a contingent one) incurred by a relevant firm in respect of a failure by the firm to comply with a requirement applicable to the carrying on by it of any activity. (6) References in those sections to the carrying on of an activity by a relevant firm are, accordingly, to be read in that case with the appropriate modifications. (6A) References in sections 404 and 404E to an “electronic money issuer” are references to a person mentioned in paragraph (a), (b), (c), (d), (h) or (i) of the definition of “electronic money issuer” in regulation 2(1) of theElectronic Money Regulations 2011 . (7) If the FCA varies a permission or authorisation of a person so as to impose requirements on the person to establish and operate a scheme which corresponds to, or is similar to, a consumer redress scheme, the provision that may be included in the permission or authorisation as varied includes— (a) provision imposing requirements on the person corresponding to those that could be included in rules made under section 404; and (b) provision corresponding to section 404B. (8) In subsection (7) the reference to the variation of a permission or authorisation by the FCA is a reference to—… (aa) the imposition or variation of a requirement under section 55L, …” (a) interest; and (b) a remedy or relief which could not be awarded in legal proceedings; (a) which is in breach of a duty or other obligation, prohibition or restriction; or (b) which otherwise gives rise to the availability of a remedy or relief in legal proceedings. (a) the duty or other obligation, prohibition or restriction, or (b) the remedy or relief, arises as a result of any provision made by or under this or any other Act, a rule of law or otherwise. (a) a person who was at any time a relevant firm but has subsequently ceased to be one; and (b) a person who has assumed a liability (including a contingent one) incurred by a relevant firm in respect of a failure by the firm to comply with a requirement applicable to the carrying on by it of any activity. (a) provision imposing requirements on the person corresponding to those that could be included in rules made under section 404; and (b) provision corresponding to section 404B. (aa) the imposition or variation of a requirement under section 55L, …”
“415A Powers under the Act Any power which the FCA, the PRA or the Bank of England has under any provision of this Act is not limited in any way by any other power which it has under any other provision of this Act.”
“We have designed the Principles as a set of regulatory expectations, not as a set of legal rights at large. The high level at which they are expressed makes it important that their interpretation and application should be in harmony with the overall body of FSA rules and guidance and declared authorisation, supervisory and enforcement policy. This might be put at risk if civil litigation between private parties were to become the engine driving the interpretation of the Principles. The investor protection need can be amply met (as it is at present) by providing for civil actionability below the level of Principles in more specific rules.”
“The FSA has existing powers to impose redress schemes on a firm-by-firm basis where a large number of consumers are affected. The power of the Treasury to initiate a collective redress scheme on a wider basis is set out in section 404 of FSMA. The Government believes there should be new powers for the FSA to require a firm or firms to make redress either on an industry wide or firm-by-firm basis as appropriate.”
“Our conclusion is that the four statutory conditions are required to be satisfied by virtue of ss.55L, 407F(7) and 404A before a single firm consumer redress requirement can be imposed, namely: loss, causation, duty and actionability must therefore be established. These correspond to and are similar to the four necessary conditions that are required to be satisfied before multi-firm consumer redress schemes can be imposed by virtue of s.404.”
“it is, at least in the absence of special circumstances, inappropriate for the court to treat a statutorily conferred discretion with no express limitations or fetters as being somehow implicitly limited or fettered”
“The FCA may impose a requirement that...”
“External aids to interpretation therefore must play a secondary role. Explanatory Notes, prepared under the authority of Parliament, may cast light on the meaning of particular statutory provisions. Other sources, such as Law Commission reports, reports of Royal Commissions and advisory committees, and Government White Papers may disclose the background to a statute and assist the court to identify not only the mischief which it addresses but also the purpose of the legislation, thereby assisting a purposive interpretation of a particular statutory provision. The context disclosed by such materials is relevant to assist the court to ascertain the meaning of the statute, whether or not there is ambiguity and uncertainty, and indeed may reveal ambiguity or uncertainty: Bennion, Bailey and Norbury on Statutory Interpretation, 8th ed (2020), para 11.2. But none of these external aids displace the meanings conveyed by the words of a statute.”
“Section 404F(7) of the Act empowers the FCA to require a firm ‘to establish and operate a scheme which corresponds to, or is similar to, a consumer redress scheme’ established under section 404 of the Act.”
“The relevant triggers for determining whether the FCA can require an authorised person with a permission to establish and operate a scheme which corresponds to, or is similar to, a consumer redress scheme are different to those that apply for an ‘industry wide’ consumer redress scheme established under section 404 of the Act. Rather than considering the test set out in section 404(1) of the Act, the FCA has to consider the relevant legal triggers for varying a permission or varying or imposing a requirement on a firm (see sections 55H, 55J and 55L of the Act).”
“if the services provided are incomplete or of less than the contracted quality, the buyer is prima facie entitled to the difference in value between the service promised and the service delivered, whether or not he has suffered any further loss and whether or not he has obtained substitute services from another supplier.”
“An authorised person who is aggrieved by the exerciseby either regulator of its own-initiative variation power or its own-initiative requirement power may refer the matter to the Tribunal”; and for the s. 206 disciplinary penalty it is found in s. 208(4)(b) FSMA which provides that “If a regulator decides to… impose a penalty on an authorised person under s. 206….the authorised person may refer the matter to the Tribunal”
“Moreover, I am not persuaded that he needs the RDC’s reasons to be stated more fully in order for him to make an informed decision whether to refer the matter to the tribunal. The risks that the FSA might put forward additional allegations and that the tribunal might increase the penalty are there and have to be taken into account.”
“Furthermore, in my judgment it is important for the tribunal to consider all the facts and evidence put before it on a reference under section 57. There are two reasons for this. The first is that its consideration of a reference is not ordinary civil litigation. There is a public interest in ensuring, so far as possible, that persons who are not fit and proper persons to perform functions in relation to a regulated activity are precluded from doing so. A narrowing of the inquiry by the tribunal that excludes relevant material from its assessment of an applicant is to be avoided, provided, of course, that the applicant is given a fair opportunity to address the authority’s case. In Mr Hobbs’ case, it could not be suggested, and was not suggested, that he did not have a fair opportunity to address the allegations that he had been guilty of repeated and persistent lying. The second reason is that if the tribunal incorrectly restricts its determination, it may be difficult for the authority to rely on the excluded facts in future in assessing, for example, whether the applicant is a fit and proper person, or should be granted an authorisation he seeks to engage in a regulated activity. To take the present case as an example, I can see that it might be arguable that on Henderson v Henderson grounds ((1843) 3 Hare 100) the authority should not be permitted to rely on allegations that it put before the tribunal but which the tribunal did not accept demonstrated that Mr Hobbs was not a fit and proper person. Such a situation should be avoided.”
“But it is significant that the 2004 Act does not go on to say that either the determinations panel or the Upper Tribunal are constrained in the conclusions they can reach by the absence of a relevant ground in the warning notice. In my judgment, the absence of a provision to that effect firmly indicates that Parliament left the question whether the determinations panel or the Upper Tribunal could do so to their discretion.”
“While [counsel for the FCA] points out that it is in the public interest for the Tribunal to make relevant findings on all matters under consideration, this should not usurp the Authority’s function to decide, with clarity and certainty, the regulatory case that it wishes to pursue. The starting point should be that if the Authority wishes to pursue an alternative or lesser case it should plead this from the outset of enforcement proceedings before the RDC and then the Tribunal itself. Pleadings on a reference to the Tribunal are in no way akin to an indictment in criminal proceedings or particulars of claim in civil proceedings. A reference is a continuation of a regulatory process that has begun by way of a Warning Notice and enforcement proceedings before the RDC. In those proceedings the Applicant is entitled to know the full nature of the allegations, findings and decisions made against him by the Authority in order to consider whether to contest the regulatory action proposed or whether to make a reference to the Tribunal.”
“73. On the one hand, just as in the tax jurisdiction of the tribunals there is a “venerable principle” that the task of the tribunals is to determine the right amount of tax due, not to decide who has the better argument (see, for example, Shinelock Limited v HMRC,[2023] UKUT 00107 (TCC) ), there is here a public interest in getting to the “right” regulatory outcome, in particular ensuring, so far as possible, that persons who are not fit and proper persons to perform functions in relation to a regulated activity are precluded from doing so. On the other hand, Parliament has established a process for resolving disputes between a subject of enforcement action and the Authority, which is based on [thorough], fair and effective administrative decision-making procedures, which are less formal, less expensive and quicker than tribunal or court proceedings. These involve a process of investigation, followed by warning and decision notices. Those objectives will be compromised if the Authority does not ensure that all relevant matters are placed on the table at the warning notice stage. That is why it has been observed, on several occasions (see, for example, Seiler at [1010]), that it is generally to be expected that the Authority will have completed its investigation before the commencement of regulatory proceedings and will carry forward the same case both through the regulatory proceedings and into the Tribunal.”
“The principle established in Barras v Aberdeen Steam Trawling and Fishing Co Ltd[1933] AC 402 and re-affirmed in R (N) v Lewisham London Borough Council[2014] UKSC 62 ,[2015] AC 1259 applies, and as Lord Hodge JSC explained at para 53: ‘… where Parliament re-enacts a statutory provision which has been the subject of authoritative judicial interpretation, the court will readily infer that Parliament intended the re-enacted provision to bear the meaning that case law had already established …’” ‘… where Parliament re-enacts a statutory provision which has been the subject of authoritative judicial interpretation, the court will readily infer that Parliament intended the re-enacted provision to bear the meaning that case law had already established …’”