Ford v the Financial Services Authority

A violation of Article 8 caused by the use of legally professionally privileged material does not automatically require a warning notice to be quashed. Under the Human Rights Act 1998, the court has a broad judicial discretion to grant a remedy that is just and proportionate. It should assess the material’s significance, whether the decision would have been made without it, and the protection available through redaction and other safeguards. At a preliminary regulatory stage, fairness requires a balance between effective investigation and the person’s opportunity to make representations. Officials who saw the material need not be removed without specific grounds for questioning their impartiality.

Mr Ford, a former director and chief executive of Key Data Investment Services Ltd, sought permission to appeal against an order of Burnett J dated 12 June 2012. The High Court had found that two emails were legally professionally privileged, but declined to quash the extant warning notice, declined to quash a protective warning notice, and declined to remove FSA officials who had seen the privileged material.

A separate appellant’s notice concerning communications with Grant Thornton was dismissed by consent after the decision in R (on the application of Prudential PLC) v Special Commissioner of Income Tax [2013] UKSC 1. The renewed application concerned the effect of the privileged material, the alleged absence of discretion to refuse relief, natural justice, and the continued involvement of FSA officials.

Application dismissed. The court unanimously concluded that there was no real prospect of successfully appealing the order of Burnett J.

1. The finding that use of the two emails violated Article 8 engaged the remedial jurisdiction under the Human Rights Act 1998. That jurisdiction is judicial rather than penal. The court must select a remedy that is just and proportionate in all the circumstances. It is not compelled to quash the warning notice.
2. Where the lower court has made an evaluative or discretionary remedial decision, the appellate court should not interfere unless the decision was wrong. Permission requires a real prospect of showing such error. No error of principle, failure to consider relevant matters, or consideration of irrelevant matters was shown.
3. The judge was entitled to regard the privileged material as peripheral and modest in comparison with the investigation as a whole. He was also entitled to conclude that the warning notice would probably have been issued without it. Redaction, retrieval and restrictions on further use provided proportionate protection.
4. At the preliminary stage of a regulatory investigation, public law fairness requires a balance between effective investigation and the individual’s opportunity to make representations. The warning notice was an initial step, and written and oral representations remained available, together with a later right of appeal to the Upper Tribunal. There was therefore no real prospect of establishing that natural justice required quashing.
5. The mere fact that FSA officials had seen or used the material before its privileged status was established did not require their removal. Specific grounds for impugning their impartiality were absent, and removal would have been disproportionate.
6. The court provisionally observed, without argument on the point, that the FSA remained under a continuing obligation to reconsider whether to proceed and to act as a reputable public body.

The Berkeley argument was rejected as applying to a different context, and Koch Shipping was treated as consistent with an evaluative assessment of risk rather than an automatic duty to quash.

1. Court of Appeal (Civil Division): On 19 July 2013, after permission had been refused on paper by Mummery LJ, the renewed application for permission to appeal was dismissed. [2013] EWCA Civ 1521
2. High Court: Burnett J’s order dated 12 June 2012 left the extant warning notice in place, did not quash the protective warning notice, and declined to remove FSA officials who had seen the privileged material. The High Court had previously found two emails privileged and made protective orders.