Financial Services Authority v Anderson & Ors

An adjournment of civil proceedings because of actual or threatened criminal proceedings requires a real risk of serious prejudice which may lead to injustice. The fact that both proceedings arise from the same facts, or that civil disclosure obligations are wider, is insufficient by itself. The court must balance prejudice to both sides and fashion a case-management response that minimises injustice. Where defendants lack representation, the court should consider the nature of the application, the issues requiring determination, available safeguards, and the costs consequences of delay. A modest adjournment may be appropriate where it gives litigants a fair opportunity to prepare while preserving the substantial benefits of summary determination.

The Financial Services Authority sought summary judgment in proceedings alleging that the defendants had carried on regulated activities without authorisation, contrary to sections 19 and 21 of the Financial Services and Markets Act 2000. The defendants applied to adjourn. They relied on possible prejudice to a continuing police investigation and on their inability adequately to prepare without professional representation, owing particularly to restraint orders, loss of access to solicitors’ files and funding difficulties. The central questions were whether the criminal investigation justified a stay or adjournment and whether fairness required more time before the summary judgment application.

The court confirmed the order adjourning the FSA’s summary judgment application until a date not before 1 March 2010.

1. Criminal investigation. An applicant for a stay or adjournment on the ground that civil proceedings may prejudice actual or threatened criminal proceedings must show a real risk of serious prejudice which may lead to injustice. The common factual foundation of the proceedings, and the possibility that civil disclosure or witness statements might be used in criminal proceedings, do not suffice. Here, the civil case concerned unauthorised regulated activity and the Article 2 defence under the Business Order, whereas the suspected criminal offences centred on dishonesty. The summary judgment hearing would principally involve pleadings and documents, with no significant risk of unexpected self-incrimination. This ground failed.
2. Representation and preparation. The third defendant faced real prejudice because the Restraint Order prevented private funding of representation and public funding appeared unavailable. The first and second defendants might also benefit from recovering files containing material relevant to their professionally settled Article 2 defence. The court did not determine the correctness of the Crown Court’s interpretation of section 41(4)(a) of POCA.
3. Balancing and case management. The court balanced the defendants’ risk of injustice against the FSA’s legitimate interest in obtaining a prompt and economical determination. An immediate hearing involving possible monetary orders of many millions would be unfair, but an adjournment to trial would risk substantial wasted costs. A modest adjournment gave time for preparation and possible representation while preserving a substantial prospect of saving trial costs.
4. Summary judgment remains distinct from trial. The court must identify any serious triable issue and may direct a trial or adjournment where a difficult statutory interpretation issue requires further assistance. It should manage the hearing, with assistance from opposing counsel where necessary, to minimise the difficulties faced by litigants in person.