ZAI Corporate Finance Ltd, R (on the application of) v AIM Disciplinary Committee of the London Stock Exchange PLC & Anor

Disciplinary proceedings conducted by a private regulatory body may ordinarily be heard in private where its rules establish privacy as the starting point. An accused party has a right to request a public hearing, not an entitlement to require one. Departure from the normal rule requires a good reason, beyond general appeals to open justice.

Article 6.1 of the Convention permits legislation or procedural rules to designate whole classes of proceedings as exceptions to public hearings, subject to judicial control. The test for apparent bias is whether the fair-minded and informed observer would conclude that there was a real possibility of bias. Professional connections or competition between a panel member’s organisation and the regulated party will not ordinarily satisfy that demanding test without a material conflict or other circumstances indicating partiality.

The claimant, a nominated adviser authorised by the London Stock Exchange to operate on AIM, challenged two case-management decisions of the AIM Disciplinary Committee. The Committee directed that disciplinary proceedings be heard in private and declined to recuse three panel members who had professional connections with organisations carrying on competing nomad or corporate finance businesses.

The claimant sought permission to apply for judicial review, arguing that the AIM rules required a public hearing and that privacy breached article 6.1 of the European Convention on Human Rights. It also alleged apparent bias, although actual bias was not alleged. The court considered whether either challenge was arguable.

1. Private hearing. AIM Handbook Rule C22.1 established a normal rule that disciplinary hearings would be private, while permitting the subject of proceedings to request a public hearing. The words “ask” and “requiring” did not confer a right to insist on publicity. Properly construed, the Committee retained a discretion to depart from privacy where the applicant showed good reason.
2. The rule had a rational purpose. Privacy preserved the possibility of a private warning or censure and protected third parties from collateral harm caused by unproven allegations. The claimant’s general reliance on open justice, and the proposed record fine, did not amount to good reason. The Committee’s decision was rational and fair, and its concise reasons were sufficient for a case-management decision.
3. Even if article 6.1 applied, privacy was compatible with it. Article 6.1 permits generic classes of proceedings to be heard in private where the relevant Convention interests justify that course. The reasoning in B v UK, P v UK supported that conclusion. The challenge to privacy was therefore unarguable.
4. Apparent bias. The applicable test was whether the fair-minded and informed observer, having considered the facts, would conclude that there was a real possibility that the tribunal was biased. The observer was neither complacent nor unduly sensitive or suspicious. The assessment was fact-specific and the threshold was high.
5. The panel members’ professional expertise and connections with firms undertaking nomad or corporate finance work did not create a real possibility of bias. Their independence, integrity and professional obligations had to be taken into account. The factual distinctions from cases involving an actual competitive dispute or an unfair process were decisive. The recusal challenge was also unarguable.
6. Permission for judicial review of both decisions was refused.

First-instance judicial review application. Permission to seek judicial review was refused on both grounds.