Earlier this year, the Supreme Court handed down its judgment in the case of Achilles Macris on what constituted "identification" of a third party for the purposes of the relevant Act. It was a narrowly drawn judgment, a judgment we described as "proving somewhat controversial in the enforcement community" (see Enforcement Watch 22 "Supreme Court Rules on Third Party Rights"). In the post-Macris world, the Upper Tribunal has in the case of a Mr Cooper delivered its first judgment on identification.
To recap, where a relevant regulatory Notice is given to one party, but which identifies and prejudices another party, that other party has the right to make representations on it. Cooper argued that he should have been given that opportunity in respect of a Notice issued to WH Ireland. (For commentary on the WH Ireland case, see Enforcement Watch 19 "22 February 2016: WH Ireland £1.2m fine and a restriction on its business"). Unfortunately for Cooper, he was significantly out of time to make his application for third party rights under the statute. His application to the Upper Tribunal therefore concerned two issues. First, whether he should be permitted to make his case out of time. Second, whether he had in fact been identified as defined in the statute.
For present purposes, the application to admit a case out of time is not of particular interest. The Upper Tribunal declined to hear it out of time, and did so by addressing the various questions set out in the Data Select case. More interesting for current purposes was the question of identification. Although it was not necessary to consider this issue in light of its finding that Cooper was out of time, the Upper Tribunal nevertheless decided to deal with identification as it might have done if it was a live issue, not least because it was the first case it had considered since Macris had been decided.
The relevant test as decided by Macris was essentially whether a person had been identified in the Notice by name or by a synonym, such as his office or position. In the case of a synonym, the person had to be identifiable from information either in the Notice or from publicly available information elsewhere.
The Supreme Court had decided that Macris had not been identified according to the test it had formulated. Cooper tried to distinguish his case from the facts in Macris. He argued that, whilst the Supreme Court had held that Macris was not the only manager to have been referred to by the expression "CIO London Management", the references in the WH Ireland Notice to "compliance oversight" could only have been a reference to him. Unfortunately for Cooper, applying Macris, the Upper Tribunal rejected his argument. It was certainly correct that Cooper held the compliance oversight function (CF10) and that no one else held that post, and that that was information in the public domain. Had the formulation "compliance oversight function" been used, the Upper Tribunal said that that would have been a reference to the person holding that function (Cooper). However, those words had not been used. Instead, reference was made for example to "compliance oversight" only or to "compliance oversight process". These were not synonyms for Cooper nor references to his position. He had accordingly not been identified for the purposes of the statute.
In a sense, the decision reached is unsurprising as the test that was articulated in the Supreme Court was narrowly drawn and left little room for manoeuvre. Nevertheless, there are some interesting aspects to mention:
- Reading between the lines of the judgment, there is maybe a sense that the Upper Tribunal was concerned that the test had been too narrowly drawn.
- Macris told us that a person could be identified if referred to for example by position or by office. Further, it held that information from outside the Notice could be used "to interpret (as opposed to supplementing) the language of the Notice." Cooper has a useful finding in respect of the type of outside information that it is permissible to draw on. That is, in deciding that reference to the compliance oversight function would have been a reference to Cooper, the Upper Tribunal assumed that the test for identification assumed that the audience to which a Notice was directed had some knowledge both of the regulatory system and the fact that the system provides for individuals performing particular functions to be approved by the FCA.
- As an aside, and as a comment on how the Supreme Court had applied its test to the facts of Macris itself, the Tribunal was interesting. It observed that Lord Sumption had not specifically dealt with the Tribunal's findings that "CIO London Management" did not exist as a body and that the way that the term was used in the Final Notice demonstrated that it was being used as a reference to a particular individual.
- As we previously observed, an individual may not be identified for statutory purposes, but nevertheless market operators may know who is being referred to. In the case of Cooper, the Upper Tribunal said that he found himself in the position that Lord Sumption had described in the Supreme Court. In effect, he was not identified for statutory purposes, but there would always be people in the know who will realise rather more than appears from simply looking at the Notice itself and who may well draw conclusions about who likely had responsibility for certain failings. It is difficult not to have sympathy with Cooper in this situation. This is especially so as this was a case in which the FCA had withdrawn its Private Warning against him.