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Publicity and Decision Notices: Foley v. FCA

Posted on 10 August 2020

The Upper Tribunal has given further guidance on what evidence it requires before ordering that a Decision Notice remain private. This article considers the Tribunal's judgment and in particular how it may impact on individuals seeking to protect their reputation.

Whether or not a Decision Notice is published can be an important factor when deciding whether to appeal to the Upper Tribunal or not. The reputational "hit" brought about by a Decision Notice can be equivalent to that caused by a Final Notice - Decision Notices may well be accompanied by an FCA press-release, attract media interest and will very likely jeopardise an individual's chances of obtaining or retaining employment especially in the regulated sector. This is so even though the Decision Notice contains a clear note that it is under appeal.   Individuals may therefore view the damage brought about by a Decision Notice to be irremediable even by a favourable Upper Tribunal decision (albeit one likely many, many months down the track) and this may make the time, cost and uncertainty of an appeal less attractive.  

Conor Foley v. FCA

Against that backdrop, it is understandable that many individuals ask whether they can keep a Decision Notice and the fact of an appeal, under embargo. The Upper Tribunal considered the question of publication in the context of an application by Conor Foley.  Mr Foley asked the Upper Tribunal to direct that an adverse Decision Notice (and details of it) not be published by the FCA pending the outcome of his appeal and also that the Upper Tribunal's register of forthcoming cases not refer to the fact of appeal.  The Decision Notice included findings that Mr Foley committed deliberate market abuse and that a penalty of £658,000 was being imposed by the FCA.   

The legal framework for such decisions is clear from statute and prior Tribunal case law and was not challenged by the parties to Mr Foley's application.  In summary, consistent with s.391 FSMA, the Upper Tribunal operates on the assumption that the interests of "open justice" require that publication by the FCA be the default position in respect of Decision Notices and similarly that details of an appeal ought usually to appear on the Tribunal Register.  Against that backdrop, the power of the Tribunal (set out in the Tribunal Rules – r14 and para3(3) of schedule 3) to prohibit publication requires the exercise of judicial discretion based on a balancing exercise of the arguments for and against publication.   However, the caselaw is clear that the principle of "open justice" creates a strong presumption in favour of publication. It is for the applicant to demonstrate, through "cogent evidence" that there is a significant likelihood that publication would result in unfairness and disproportionate damage to the applicant, such as the destruction or severe damage to a livelihood or a business.  Mere embarrassment, reputational harm, or the possibility of harm or damage to a business or a livelihood is not enough.

A key part of Mr Foley's application focussed on whether or not his teaching contract with Trinity College, Dublin (renewed annually) would be renewed if the Decision Notice was to be published.  Mr Foley asserted that the College would not renew his contract.  This would in turn impact Mr Foley's ability to complete his PhD (funded by his teaching) and hamper his goal of becoming an academic.   However, Mr Foley was unable to support this assertion with objective evidence, let alone "cogent evidence".  It was argued on his behalf that he could not obtain corroboration for his assertion without defeating the very purpose of the privacy applications. The Upper Tribunal did not accept this.  It said that enquiries could have been made for objective evidence as to whether persons in similar positions had their contract renewed.  The Upper Tribunal was also not persuaded that the limited objective evidence before it showed that there was a "significant likelihood" of Mr Foley's contract not being renewed.  In this regard it said that it would be "disappointing" if the College as a "fair minded employer" would not await the decision of the Upper Tribunal.  Finally, the Upper Tribunal did not accept that even if Mr Foley's contract was not renewed, that his career as an academic would be thwarted given his other resources to pay his fees and potential leniency from the College itself.  Mr Foley's application was therefore rejected. 

Comment

Despite the Upper Tribunal's hope that the College would be "fair minded" and wait for the final determination of the Upper Tribunal, in reality many employers will not adopt such an approach and will be more concerned with the reputational damage the Decision Notice may cause.  It is clear from the Upper Tribunal's decision that Mr Foley had not informed the College about the regulatory proceedings against him.  However, in the regulated sector it is far more likely that employers will know about regulatory proceedings already (the individual having properly declared the proceedings and the preceding investigation) and must certainly be told about a Decision Notice.   Nonetheless, regulated employers may well feel unable to continue to support an employee who is the subject an adverse Decision Notice and this is all the more likely where the Notice is made public and jeopardises the reputation of the firm itself.   This reality could usefully be factored into the Upper Tribunal's balancing exercise – rather than an assumption that employers will act fairly and in the employee's best interests.  Indeed, such an approach is already part of the FCA's guidance around identifying individuals when information about Warning Notices are published (EG 6.2.6(2)).     

Whilst it is appropriate that the concept of "open justice" should result in a high bar for privacy applications, there should also have been sympathy for Mr Foley's inability to obtain corroboration of the College's likely stance.  The Tribunal accepted that Mr Foley (with his direct experience of the College and its processes) genuinely believed that the College would not renew his contract.  It was also logical and credible that the College might act in the way that Mr Foley predicted and it was no doubt difficult for Mr Foley to obtain corroboration in the context of such a niche market (Irish secondary education).  Indeed, even where such corroboration can be obtained in the context of niche markets, it has not always been accepted as credible by the Upper Tribunal (for example the Upper Tribunal in Prodhan v. FCA rejected corroborative evidence regarding the impact of the Decision Notice in the Bangladesh financial services market).   The Upper Tribunal should surely therefore adjust its expectations regarding the quality of corroborating evidence that can reasonably be obtained, depending on the market in which the individual operates.   

In the meantime, it is clear that the Upper Tribunal is only prepared to grant privacy in the most exceptional of circumstances. 

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