Qualifications for Industry Limited v The Office of Qualifications and Examinations Regulation [2026] UKFTT 529 (GRC)

[2026] UKFTT 00529 (GRC)Case Reference: FT/EB/2025/0001
First-tier Tribunal
(General Regulatory Chamber)
Exam Board
Venue Heard at: Leeds Tribunal CentreHearing Heard on: 19/01/2026Date 13 April 2026
Before
JUDGE DWYERJUDGE ARMSTRONG-HOLMES
Between
Qualifications for InDUStry LmitedAppellantTHE OFFICE OF QUALIFICATIONS AND EXAMINATIONS REGULATIONRespondentQualifications for InDUStry LmitedAppellantTHE OFFICE OF QUALIFICATIONS AND EXAMINATIONS REGULATION RespondentMichael Armitage Counsel for the Respondent for AppellantR McClelland (Director) Appellant J Murphy (Responsible Officer), B Horne for RespondentPreliminary Decision: The appeal is to be determined on the merits as a re-hearing.Decision: The appeal is Dismissed. The decision made by the Respondent 27 January 2025 to impose a Monetary Penalty of £50,000 and pay costs of £15,846.22 is upheld.REASONS
[1]The following reasons set out the conclusions reached by the Tribunal in making the decision in the substantive appeal. The reasons for the decision reached on the preliminary issue are attached as Annex 1.

Background

[2]This appeal concerns a decision by the Respondent, The Office of Qualifications and Examinations Regulation (“OFQUAL”), to impose a Monetary Penalty in the sum of £50,000 on, and recover costs of £15,846.22 from, the Appellant, Qualifications for Industry Limited (“QFI”).[3]QFI is a vocational training organisation offering vocational courses leading to recognised qualifications. QFI was initially approved by a Scottish accreditation body in 2016 to offer qualifications in Scotland and QFI was approved in 2017 by the Education and Skills Funding Agency to offer End-point assessments (“EPA”) for a number of apprenticeship standards.[4]In 2020, OFQUAL was elected as the External Quality Assurance Providers for most EPAs in England. OFQUAL is a Non-Ministerial Government Department established under Part 7 of the Apprenticeships, Skills, Children and Learning Act 2009 (“ASCLA”). OFQUAL has statutory responsibility for regulating Awarding Organisations in England. An Awarding Organisation is a body which awards or authenticates academic or vocational qualifications in respect of learners in England for which it has been granted 'recognition' by Ofqual under s. 132 ASCLA. Awarding Organisations are granted recognition in relation to descriptions of qualifications or particular qualifications for learners. Where an Awarding Organisation wishes to be recognised for an EPA qualification, OFQUAL will recognise it for that particular EPA qualification.[5]QFI applied to OFQUAL and was granted recognition as an AO on 05 March 2021 and was recognised to award vocational qualifications at 4 levels in 6 Sector Subject Areas as well as 6 EPA qualifications. On the same date, as part of the recognition decision, OFQUAL imposed Special Conditions on QFI. The relevant Special Conditions specified were:
“QFI 2.1 - QFI must take all reasonable steps to ensure that: a) no more than 200 Learners in total are at any one time registered to take its qualifications; and b) no more than 200 Learners in total take assessments for its qualifications in any 12 month period. QFI 2.2 - Before 5 March 2021 QFI must prepare and must thereafter maintain and comply with, a written plan setting out how it will secure compliance with Condition QFI 2.1. The written plan must include how it will protect the interests of learners. QFI 2.3 - QFI must promptly notify Ofqual if it has cause to believe that demand for its qualifications over the 12 month period (starting on the day of any such notification) might exceed the thresholds specified in QFI 2.1. QFI 2.4 QFI may at any time submit a written application to Ofqual seeking variation of the thresholds specified in Condition QFI 2.1. In making such an application, QFI should include evidence to show how it will be able to comply with General Condition A5 in light of its anticipated Learner numbers. QFI 2.5 Nothing within Condition QFI 2 will affect the status of a qualification awarded in breach of this Condition.”
[6]In 2021-2022, QFI made three separate requests to OFQUAL to expand QFI’s recognition, each of which Ofqual ultimately granted. The first expansion request was dated November 2021, resubmitted in February 2022 and was approved by OFQUAL in June 2022.[7]In May 2022, QFI made its second expansion request. OFQUAL approved the second expansion request in August 2022. QFI submitted its third expansion request in August 2022. Ofqual approved the third expansion request in December 2022.[8]On 14 April 2023, Ofqual notified QFI that it had decided to investigate a concern that QFI might have failed to comply with its Conditions of Recognition. On 7 September 2023, QFI was issued with a draft investigation report setting out compliance concerns in a number of areas, in particular compliance with the Special Conditions set out above. QFI was given an opportunity to provide representations in response to the draft report. Ofqual also notified QFI that it proposed to impose additional Special Conditions.[9]On 26 October 2023, prior to the final investigation report being issued, QFI notified Ofqual that it intended to surrender its recognition. QFI explained that the imposition of further special conditions would mean that it could no longer operate as a profitable business. On 9 November 2023, QFI was issued with a final investigation report which addressed QFI’s representations and set out a number of non-compliances, including failures to comply with the Special Conditions. Specifically, that QFI had breached special condition 2.1 (a) as the number of learners registered with QFI on 30 April 2023 was 848, and a breach of special condition 2.1(b) as during a seven-month period from 1 January 2023 to 13 July 2023, QFI assessed 237 learners with QFI continuing to assess learners notwithstanding the requirements of the Special Condition.[10]On 24 November 2023, in view of QFI’s decision to surrender its recognition, which included QFI creating a plan to withdraw each of its EPA qualifications from the market, Ofqual informed QFI that it took the view it was no longer necessary to proceed with the proposed additional Special Conditions.[11]On 20 February 2024, QFI was notified that Ofqual intended to pursue enforcement action notwithstanding its decision to surrender its recognition. On 7 June 2024, Ofqual sent QFI its final statement of case, which QFI was able to make representations on. An enforcement panel met on 2 occasions. The Panel ultimately determined that a Monetary Penalty in the sum of £50,000 was appropriate in relation to a breach of learner caps imposed by special condition 2.1. and to impose costs in the sum of £15,846.22. On 27 January 2025, Ofqual issued the Notice of Monetary Penalty and Notice of Costs Recovery to QFI. The Tribunal received an appeal against the Notices from QFI on 12 February 2025.[12]From June 2024, QFI has been a dormant company after surrendering its recognition and has submitted it continues not to operate due to the reputational damage and further special conditions proposed resulting in the business no longer being viable. The Law[39]The Apprenticeships, Skills, Children and Learning Act 2009 (“ASCLA”) Section 151A provides Ofqual with the power to impose monetary penalties: (1). Subsection (2) applies if it appears to Ofqual that a recognised body has failed to comply with a condition to which the recognition is subject. (2). Ofqual may impose a monetary penalty on the recognised body. (3). A “monetary penalty” is a requirement to pay to Ofqual a penalty of an amount determined by Ofqual in accordance with section 151B. (4). Before imposing a monetary penalty on a recognised body, Ofqual must give notice to the body of its intention to do so. (5). The notice must— (a). set out Ofqual's reasons for proposing to impose the penalty, and (b). specify the period during which, and the way in which, the recognised body may make representations about the proposal. (6). The period specified under subsection (5)(b) must not be less than 28 days beginning with the date on which the notice is received. (7). Ofqual must have regard to any representations made by the recognised body during the period specified in the notice in deciding whether to impose a monetary penalty on the body. (8). If Ofqual decides to impose a monetary penalty on the body, it must give the body a notice containing information as to— (a). the grounds for imposing the penalty, (b). how payment may be made, (c). the period within which payment is required to be made (which must not be less than 28 days), (d). rights of appeal, (e). the period within which an appeal may be made, and (f). the consequences of non-payment. Section 151B – Monetary penalties: amount – states: (1). The amount of a monetary penalty imposed on a recognised body under section 151A must not exceed 10% of the body's turnover. (2). The turnover of a body for the purposes of subsection (1) is to be determined in accordance with an order made by the Secretary of State. (3). Subject to subsection (1), the amount may be whatever Ofqual decides is appropriate in all the circumstances of the case. Section 151C provides a right of appeal against a Monetary penalty: (1). A recognised body may appeal to the First-tier Tribunal against— (a). a decision to impose a monetary penalty on the body under section 151A; (b). a decision as to the amount of the penalty. (2). An appeal under this section may be made on the grounds— (a). that the decision was based on an error of fact; (b). that the decision was wrong in law; (c). that the decision was unreasonable. (3). The requirement to pay the penalty is suspended pending the determination of an appeal under this section. (4). On an appeal under this section the Tribunal may— (a). withdraw the requirement to pay the penalty; (b). confirm that requirement; (c). vary that requirement; (d). take such steps as Ofqual could take in relation to the failure to comply giving rise to the decision to impose the requirement; (e). remit the decision whether to confirm the requirement to pay the penalty, or any matter relating to that decision, to Ofqual. Section 152A ASCLA provides that Ofqual can seek costs incurred by Ofqual in relation to imposing a sanction on the recognised body. Costs include investigation costs, administration costs and the costs of obtaining expert advice (including legal advice). 47. The Appeal[13]The Appellant appealed on the basis that the Monetary Penalty and costs are based on an error of fact as the decision was based on a misunderstanding of the conditions which had been imposed upon QFI by Ofqual which it is alleged were breached; and if any such breaches did occur, Ofqual’s own actions(a) showing its acquiescence to such breaches barring Ofqual from subsequently seeking to enforce any alleged breach; and/or(b) entitling QFI to rely on Ofqual’s actions or omissions as evidence of consent.[14]QFI also seeks to challenge the decision on the basis that it is unreasonable because the conditions that Ofqual intended to impose upon QFI were the cause of QFI requiring to cease trading. QFI therefore has no means of generating any income to pay any penalty. The penalty is excessive and unreasonable due to both the effect of conditions imposed by Ofqual having already caused QFI to cease trading and further given the factual errors which gave rise to such conditions being imposed.[15]The Respondent defend the decision on the basis that OFQUAL’s actions did not contribute to any breach and OFQUAL’s conduct did not give rise to legitimate expectation on the part of QFI that they would not take enforcement action. OFQUAL’s decision to impose a financial penalty was therefore based on a series of sensible and reasonable considerations, specifically reflecting Ofqual’s published policy. The Evidence[16]The Tribunal considered a bundle of 930 pages which included the Appeal and Reply from the QFI and the Response from OFQUAL and documentary evidence. The bundle contained witness statements from R McClelland (Director) J Murphy (Responsible Officer) B Horne on behalf of QFI and E Scott from OFQUAL. The Respondent provided a skeleton argument before the hearing and a chronology with comments from QFI. QFI had provided its own chronology of events, which was in some respects, more detailed.[17]At the oral hearing OFQUAL were represented by Counsel Michael Armitage and the Tribunal heard evidence from R McClelland, J Murphy and B Horne on behalf of QFI and E Scott on behalf of OFQUAL. The Tribunal considered all of the evidence given in the Appeal bundle and at the oral hearing, whether or not specifically referred to in this judgment. Discussion Wrong in Law Nothing in the Appeal bundle indicated that QFI disputed that the decision under appeal was wrong in law. No issue was raised in relation whether OFQUAL had the power to make the decision or that there were any procedural errors in the decision-making process which would render the decision invalid in law. The evidence provided to the Tribunal suggests that this is correct. Therefore, we have not considered this ground of appeal further.

Error of Fact

[18]The first ground of appeal raised by QFI relates to an error of fact. For an error of fact to be established, the fact must be a mistake as to a fact which is uncontentious and objectively verifiable. Whilst it is clear that there is no dispute between the parties that the special conditions in 2.1 were breached (i.e. the number of registered learners exceeded 200 at 848 and over 200 assessments (237) were carried out in a 9 month period in 2023), the alleged error of fact is that the special conditions no longer existed as OFQUAL had either expressly or impliedly agreed to waive those special conditions, so that they longer applied.[19]On the evidence provided to the Tribunal it is clear that notwithstanding any confusion on behalf of either party, the written communications provided by OFQUAL clearly stated that the special conditions in QFI 2.1 still applied before the commencement of the investigation. QFI’s position is that the expansion requests seeking further qualification recognition also included a formal application to increase the learner caps in special condition 2.1(a). However, 2 of the decision letters expanding the scope of recognition state that special condition QFI 2.1 still applies. In the first decision letter on page 2 a separate paragraph states “Please note that Special Conditions QFI 1 (submitting qualifications to the Register) and QFI 2 (restriction on learner numbers) from when you were first recognised remain in place”. The second decision letter is silent in relation to any special conditions but does not expressly confirm that they have been varied. The 3rd decision letter expanded the scope of recognition but imposed further special conditions on QFI. The first paragraph of the letter states “I am writing on behalf of Ofqual to inform you that we will expand your scope of recognition to include End-Point Assessments (EPAs). Your recognition is also subject to additional conditions (known as Special Conditions) which are set out in an annex to this letter. These are in addition to the Special Conditions which are already in place.”[20]Whilst oral evidence suggested that the express instruction that these conditions were still in existence were too far down in the letters or missed, and there was confusion amongst the officers for QFI whether or not they had been lifted, it is clear and unambiguous in the first decision letter. Whilst the second decision letter does not mention the special conditions, they do not imply that they have been lifted and the 3rd decision letter makes it clear that not only are the original special conditions in place, but further special conditions were to be added.[21]The evidence does not suggest that QFI were operating under the misapprehension that the special conditions in QFI 2 relating to learner numbers had been expressly or impliedly removed or modified. The QFI internal risk log from August 2022 noted the cap of learner numbers as being high risk and a note that a formal request will be made to increase the cap to 500. The note acknowledges that the current special condition is still in place. This evidences that internally QFI were still aware that the special condition had not been expressly or impliedly lifted or that permission had been granted in the expansion requests to exceed the restriction within the special condition. In August 2022 the notes from a board meeting show that although QFI thought OFQUAL should be aware that numbers will soon be in excess of the cap, they acknowledge that formal notification has not been received and B Horne was tasked with seeking formal sign off from OFQUAL.[22]Whether or not OFQUAL were aware or ought to have been aware that the numbers had already been exceeded, or whether they should have carried out a review, or contributed to the number being exceeded in any way is not a consideration for whether the decision was based on an error of fact. These issues are more properly considered in relation to the reasonableness of the decision.[23]For the reasons given above we do not consider that the evidence shows that OFQUAL had expressly or impliedly varied special condition QFI 2.1 and QFI were fully aware of the fact that it had not been varied. Therefore, there has been no error of fact in that the learner numbers in special conditions 2.1 a) and b) had been breached and the special conditions still existed at the time the decision under appeal was made. Unreasonable[24]We agree that the established principle for whether a decision is unreasonable concerns the process of reasoning by which the decision is reached and whether the outcome of that process is so unreasonable that no reasonable authority could ever have come to it.[25]Despite the Tribunal determining that this was a re-hearing of the full merits of the decision in the preliminary decision, the Tribunal considers that it must accord the body tasked by Parliament with primary responsibility for making the decision deference or ‘special weight’. The question that the FTT must address is, does the Tribunal consider that the authority should have decided the application differently? (Waltham Forest LBC v Hussain & Ors [2023] EWCA (Civ) 733 at paragraph 64).[26]The Appellant submits that the 3 expansion requests to expand recognition of the EPA’s offered included an application to increase the numbers and were also an official variation request to special condition to 2.1 to increase the learner caps. By providing projections of learner numbers which exceed the 200 set out in Special condition 2.1 in the expansion requests, QFI had notified OFQUAL that the learner numbers would be breached. By agreeing to the expansion requests, OFQUAL had considered the increase in learner numbers and agreed to them as part of the expansion request. If they did not, this was an error on the part of OFQUAL and it is unreasonable to impose a penalty on QFI due to their error or misunderstanding.[27]OFQUAL submit that decisions as to whether to impose a penalty are a matter for Ofqual. The statutory discretion in s. 151A of ASCLA, with the only relevant precondition being that it “appears to OFQUAL” that there has been non-compliance with a condition of recognition. OFQAUL did not materially contribute or bare any responsibility for the breach which would render its decision unreasonable.[28]Having considered the evidence, it is not clear to us that the expansion requests made by QFI include an explicit application to vary special condition 2.1. The projected numbers in the expansion request do not explicitly indicate that the learner numbers will be beached and are difficult to understand. For example, in the first expansion request the table of learner numbers give an overall total of 326 confirmed registrations, however 245 of those state that they are over the next 3 years. This reads to us as a projection and not as QFI now state, that they were actual registered learner numbers at that particular point in time. In our view, on a plain English reading of the document, it is a reasonable presumption for the reader of the document to understand that the leaner number may stay below 200 over the next 3 years, as leaners complete qualifications and new ones are added over the next 3 years. Similarly, 326 registrations over 3 years does not indicate that over 200 assessments will be carried out in any 12 months period. Oral evidence from OFQUAL confirmed that the reviewer of the expansion requests was of this opinion, which we consider is a reasonable one on reading the document provided.[29]Furthermore, later in the same document, QFI quote the special conditions in 2.1 and state “We have abided by QFI 2.1 and QFI 2.2. This document and our previous submission material indicate that we are likely to remain within QFI2.1 ~182 Apprentices (see above monthly profile). We do wish to indicate however that we have secured ~300 Apprentice EPAs, so it is likely that we will be exceeding the thresholds specified in Condition QFI 2.1 between now and 31 January 2023. We are stating this in line with QFI 2.3. We will of course be making a formal application in line with QFI 2.4; and this document and other submitted materials will constitute part of the evidence for Ofqual’s consideration to show how QFI will be able to comply with General Condition A5 in light of our anticipated Learner numbers.” We consider this plainly sets out that as at the date of the current expansion request there has been no breach of the special conditions and at best an indication that they may do in the future, but QFI are fully aware that a formal application is required and will be forthcoming if necessary.[30]Oral evidence given by QFI as to the discrepancies in the expansion requests in light of what QFI claim were that there were multiple owners of the document and it was an oversight that that statement had not been removed. Whilst we accept that this may be the case and there was no intention to mislead OFQUAL on the part of QFI, our view is that a reasonable regulator would rely on the statements made by an awarding organisation in any application to form a decision. We do not consider that a regulator is required to go behind explicit statements and proactively take further investigation unless they are alerted to an existing problem.[31]The further 2 expansion requests are similarly vague in terms of numbers and we have not identified anything that would suggest a direct notification that the numbers have already been breached or that QFI would not make a formal application to vary the numbers if necessary.[32]We accept that QFI found dealing with OFQUAL frustrating and there was confusion on both sides. The minutes of meetings provided between QFI and OFQUAL do give more context to the oral discussions taking place and we understand that QFI were raising the issue of learner numbers and stating that further expansion requests would likely lead to more learners being registered than the special conditions allowed, if those standards were transferred to OFQUAL. However, the meeting when this took place is in October 2021, before any expansion request had been submitted and agreed. It also predicts future leaner numbers and the 328 figure of registered learners quoted, are registered leaners do not currently relate to standards regulated by OFQUAL. The indication was ‘if’ these standards transfer to OFQUAL they will breach the special condition and not until December 2021, when they will transfer to OFQUAL. The actual expansion request drafted by QFI explicitly confirmed that the numbers had not been breached and the registration confirmed the figures provided were over the next 3 years. Within these meetings, QFI confirmed and accepted that they understood that they would need to make a formal variation application if this was the case. As was accepted by QFI at the hearing, no formal application was ever made.[33]We do not consider it was reasonable for QFI to assume that the formal process of seeking a variation was not required, nor do we consider it reasonable to presume that as standards moving across to OFQUAL had learners attached to them that the special conditions did not apply. It is clear from the board minutes and risk log that QFI knew this not to be the case. We find that the meetings and expansion requests are not clear on the part of QFI. An indication that a special condition will be breached is not a formal request and does not amount to a notification that QFI is making a formal request to vary the special conditions. At all times QFI were notified that to vary the special condition they needed to make a formal notification in accordance with special condition 2.4. QFI have not provided a satisfactory explanation as to why this was not done, especially in light of the assurances given in the meetings that they would do so. Oral evidence provided was that OFQUAL were not easy to deal with, and it is not possible just pick up the phone to them, however, QFI made the expansion requests through the portal and had email addresses and methods of writing to OFQUAL, which they did on other occasions. The first explicit request to vary the special condition and a table of leaner numbers which states the number of EPA’s carried out, was not made until March 2023, just before the commencement of the investigation, indicating that QFI knew how best to contact OFQUAL and what the requirements of special condition 2.4 were, if they wanted to increase their learner numbers.[34]Therefore, we find that the conclusions drawn by OFQUAL from the information provided in the expansion requests were reasonable on the information provided by QFI. OFQUAL are entitled to rely on the information provided by an authorised organisation in making a decision and relied upon the fact that QFI were aware of what they were required to do under those special conditions, if they wished them to be varied. Whilst we accept that there may have been confusion on both sides, a plain reading of information submitted by QFI provides a reasonable justification for OFQUAL’s submission that they were unaware that the leaners numbers had already been breached. This is further supported by QFI’s recognition in both it’s board meeting notes and request in March 2023 that the leaner caps remained and had always remained in place. Therefore, there can be no legitimate expectation that if QFI did not follow the required steps, enforcement action would not be considered. If this was the case it would not have been recognised as a high risk factor to their business. As with many Regulations, the burden to ensure compliance with Regulations rests with those that are being regulated. Many Regulators do not have the resources to proactively cross check all information provided to them and it is reasonable to expect that those making applications or requests ensure the accuracy of the information provided to the regulator. In this present case, the special condition clearly states “QFI must take all reasonable steps to ensure that…” the special conditions are complied with.[35]Any confusion caused by QFQUAL does not go to the reasonableness of the decision as QFI have the responsibility for a majority of the confusion in their written communications with OFQUAL and it was their responsibility to clarify or vary any potential breaches before they occurred. Whilst no allegations of prejudice to the learners was relied upon in the decision, the Regulator has responsibility for setting thresholds or special conditions in line with their experience of the industry they regulate. If QFI considered the conditions unreasonable, as discussed above, they were at liberty to apply to vary the special conditions. OFQUAL considered those special conditions were justified in the circumstances and that any breach of them required regulatory action. We are not persuaded by the evidence provided by QFI that they have materially caused or contributed to any breach and therefore their decision to take regulatory action is one which a reasonable regulator could take.[36]QFI have also submitted that the decision to impose a monetary penalty and pay costs is unreasonable as the actions of OFQUAL have caused QFI to become dormant. QFI therefore has no means to generate any income to pay any penalty. We note that no evidence was submitted by QFI about any lack of funds to pay any fine and becoming dormant does not indicate any lack of funds. There has been no submission as to whether a lower level of penalty would be more appropriate in the circumstances and the only statutory constraint on what OFQUAL consider reasonable is that it must not exceed 10% of a company’s turnover. We have not been provided with any evidence to suggest that the £50,000 is outside of this threshold, when the decision was made and QFI was active.[37]We also note that the decision to make QFI dormant was made in large part to the additional special conditions that OFQUAL sought to impose at the conclusion of the investigation. Whilst we accept that QFI have concluded that the business was no longer viable, if those conditions were imposed, QFI were entitled to challenge those special conditions before coming into effect. Whilst we appreciate that QFI consider OFQUAL have forced them out of business, the decision to impose a monetary penalty was made whilst QFI was still active and was not a factor in the decision-making process. The decision to impose further special conditions is a separate decision which was not challenged by QFI. Therefore, it is possible that QFI could have negotiated the special conditions and continued to operate but chose to become dormant in consequence of the investigation. It is not known whether there would have been an impact from any reputational damage as QFI did not continue to operate after the decision was made. It is possible that QFI could have paid the monetary penalty and continued to operate and we have not been provided with any evidence to show otherwise. Leading up to the decision, QFI accepted they had a large reserve of money which was not currently allocated. QFI have gained financially from breaching the special condition in having more learners registered and assessments undertaken. No evidence of the commercial viability of the operating model was provided and we therefore cannot conclude that the decision to impose the monetary penalty and costs was unreasonable on that basis as we cannot know how specifically the monetary penalty would have affected operations going forwards.[38]Similarly, QFI raised that they are being made an example of and have been targeted by OFQUAL. We can only consider the circumstances of this individual decision and we understand that any reference to a decision considering setting an example is to the industry as a whole, not that one organisation should specifically be made an example of. In balancing whether an organisation should be fined, if the allegations are borne out, a Regulator also needs to consider the wider implications and whether a monetary penalty sets an example to other organisations in general, not whether one organisation in particular should be used as a targeted example. We were not provided with any evidence that shows that QFI were treated differently to any other organisation or that OFQUAL treated QFI differently to another organisation which had breached the same conditions or that OFQUAL did not follow the published guidance in decided whether a money penalty was appropriate. Therefore, we did not consider there was any bias to QFI which would render the decision unreasonable.[39]QFI also raised a conflict of interest, in that the investigation sought information from a competitor which was unfair. Having reviewed the investigation report and final decision, we do not consider that any background information sought during the investigation, regardless of who gave that information unduly prejudiced the eventual decision. The eventual decision was made based on a wide variety of sources and the conclusions largely drawn on information provided by QFI in the investigatory process.[40]Therefore, we find that the decision was reasonable in all of the circumstances, taking account of what information was provided to OFQUAL by QFI during their registration and the seriousness of the breach. It is a decision which any reasonable regulator could have made and therefore the Tribunal cannot fetter that discretion on the grounds of unreasonableness.

Conclusion

[41]For the reasons given above we do not find that the decision under appeal was based on an error of fact or was unreasonable taking account of all of the circumstances that led to the decision. Therefore, we uphold the decision to impose a Monetary Penalty of £50,000 and pay costs of £15,846.22.[42]We understand that this decision will be disappointing to QFI as we understand that they consider that they are no longer able to operate as a business as a consequence of this decision. We do not consider that there was any attempt to deliberately deceive or breach the special conditions imposed by OFQUAL, and QFI went to great lengths to try to ensure compliance by recruiting officers and board members with compliance and OFQUAL experience. However, despite this effort QFI did not comply or make any timely proactive steps to rectify the breach and for the reasons given above, the Tribunal cannot interfere with the decision of their Regulator, OFQUAL, on the grounds that there was an error of fact or that the decision was unreasonable on the evidence provided. Signed Judge Dwyer Date: 02/04/2026 Annex 1 – Preliminary Decision

The standard of review applicable on this appeal

[43]The Respondent, OFQUAL raised a preliminary point of law concerning the standard of review to be applied on an appeal of this kind. As this is the first appeal that has been heard for this particular appeal right, the resolution of this matter was likely to have implications for the conduct of the present appeal and any future appeals under the relevant provision of ASCLA and OFQUAL and therefore it was submitted that this matter was determined at the outset of the appeal hearing.[44]The present appeal is brought under section 151C and 152B of ASCLA, however, neither section 151C, 152B, nor any other provision in ASCLA specifies the standard of review to be applied by the First-tier Tribunal when hearing and determining appeals of this kind. The statutory scheme does not specify whether such appeals should be determined ‘on the merits’ (as a ‘rehearing’) or whether they are to be determined in accordance with judicial review principles (or something in between).[45]Many appeals to the GRC take the form of re-hearings, in which the Tribunal receives evidence that was not before the original decision-maker, including oral evidence. Appeals under s. 58 of the Freedom of Information Act 2000 (“FOIA”) are an example of this approach. In Repsol Sinopec Resources UK Ltd v Secretary of State for Business, Energy and Industrial Strategy [2019]at [34], the “general approach” to regulatory appeals in the GRC is that “unless the legislation indicates otherwise, the appeal is de novo, i.e. it requires the Tribunal to stand in the shoes of the regulator and take a fresh decision on the evidence, giving appropriate weight to the decision-maker’s original decision on the evidence” .[46]OFQUAL submits that, irrespective of any such “general approach” on the part of the GRC, an examination of the legislation in the present appeal indicates that the appeal should be determined in accordance with Judicial Review principles rather than as a de novo re-hearing, having regard the nature of the underlying discretion afforded to Ofqual to impose monetary penalties under s. 151A of ASCLA, and the grounds of appeal specified in s. 151C of ASCLA.[47]The specific grounds of appeal specified in section 151C OFQUAL submit provide a clear further indication that the Tribunal ought to determine appeals of this kind in accordance with Judicial Review principles. Firstly, two of the three specified grounds of appeal “wrong in law” and “unreasonable” (s. 151C(1)(b) and (c)) correspond to two out of the three grounds of judicial review (illegality and irrationality. The third specific ground of appeal (“error of fact”: s. 151C(1)(a)), is now also a well-established, free-standing ground of Judicial Review. In formulating the grounds of appeal in s. 151C(1)(a)-(c) in a manner that directly invokes conventional standards of Judicial Review, Parliament must be taken to have acted deliberately.[48]Secondly, and in contradistinction with other statutory provisions conferring rights of appeal to the GRC (e.g. section 58 of FOIA), section 151C of ASCLA does not permit the Tribunal to overturn a decision of Ofqual on monetary penalty on the basis that the Tribunal thinks that Ofqual ought to have exercised its discretion differently. This, OFQUAL submits is another compelling signal that Parliament did not intend for appeals under s. 151C of ASCLA to take the form of a re-hearing.[49]Whilst s. 151(4) of ASCLA grants the Tribunal the power to vary a requirement imposed by Ofqual to pay the penalty, or to take such steps as OFQUAL could take in relation to the failure to comply giving rise to the decision to impose the requirement, OFQUAL submit that the Tribunal’s remedial powers once it has determined an appeal under s. 151C of ASCLA must not be confused with the standard of review to be applied by the Tribunal in determining whether to allow an appeal in the first place. However, as a matter of candour, Ofqual noted that in Electro Rent Corporation v Competition and Markets Authority [2019] CAT 4, an appeal under s. 114 of the Enterprise Act 2002 (which permits the Competition and Markets Authority to impose fines on companies that fail to comply with interim orders in merger cases), the Competition Appeal Tribunal held that a statutory provision empowering the Tribunal to “quash the penalty and substitute a penalty of a different nature or such lesser amount as the Tribunal considers appropriate” was an indicator that the Tribunal was not restricted to the Judicial Review standard.[50]We accept that the wording of the legislation gives rise to a question to be considered as to the standard of review to applied in appeals under section 151C and 152B of ASCLA. The drafting of the legislation gives limited grounds for bringing an appeal, yet the powers afforded to the Tribunal are akin to a de novo re-hearing. Therefore, the Tribunal must make a determination as to what is more likely that Parliament intended in legislating that an appeal of this kind is to be heard by this Tribunal.[51]We do not accept that the nature of the underlying discretion afforded to OFQUAL in determining a Monetary Penalty is persuasive to limiting the scope of the appeal to Judicial Review principles. We cannot identify one Regulator to which decisions have a right of appeal to the First-tier General Regulatory Chamber which are not afforded a full discretion to take the regulatory decision under appeal. In many full merit appeals, the Tribunal must afford the specialist regulator appropriate weight to the decision as the body tasked by parliament with making such decisions.[52]We also do not consider that ‘unreasonable’ ultimately concludes that this is Wednesbury unreasonable akin to irrationality and is therefore not conclusive that directly invokes conventional standards of Judicial Review. If Parliament had intended to be confined by the standards of Judicial Review, it was open to them confine the ground of appeal to irrationality only.[53]Similarly, whilst in formulating the grounds of appeal in s. 151C(1)(a)-(c) in a manner that directly invokes conventional standards of Judicial Review, if Parliament must be taken to have acted deliberately, they must also have acted deliberately in drafting the wide range of powers available to the Tribunal on a successful appeal. Therefore, we consider there is a clear contradiction in the drafting which cannot have been deliberate on the part of Parliament and in the event that this is not clear, the Tribunal must look at the wider circumstances to understand Parliament’s intention.[54]We accept that there are rights of appeal which are reviewable matters only which are to be considered by a First-tier Tribunal, specifically, for GRC some Charity appeals are identified in statute as being reviewable matters. However, we note that these appeals are explicitly legislated as Judicial Review type appeals, without ambiguity. Other appeals rights for which Parliament intends to restrict to Judicial Review principles only have ultimately been decided by Parliament to be transferred straight to the Upper Tribunal or High Court. An example of which is appeals under the Online Safety Act 2023.[55]We consider that had the legislation been drafted in such a way as to limit the Tribunal’s powers to making a declaration or a remittal to the Regulator, this may have been persuasive that the intention was to limit the consideration of the appeal to Judicial Review principles. However, by providing the Tribunal with the power to vary the decision and “take such steps as Ofqual could take in relation to the failure to comply giving rise to the decision to impose the requirement” persuades us that this cannot be the case. This effectively allows the Tribunal to stand in the decision makers shoes and it is hard to understand how this the Tribunal could exercise this power without the Tribunal conducting a de novo re-hearing, on the merits of the appeal.[56]Therefore, we do not consider that the legislation specifically indicates that this appeal is limited to Judicial Review principles and is de novo in accordance with Repsol Sinopec Resources UK Ltd v Secretary of State for Business, Energy and Industrial Strategy [2019].