Przemyslaw Soszynski t/a Phenix Consultancy v The Financial Conduct Authority

On a non-disciplinary reference concerning refusal of regulatory authorisation, the Upper Tribunal must dismiss the reference if the regulator’s decision was reasonably open to it. It may remit only where its findings show that the decision falls outside that range.

An applicant’s repeated failure to provide information, resistance to regulatory requirements, inadequate financial and non-financial resources, and deficient systems and controls may cumulatively establish failure to satisfy the effective supervision, appropriate resources and suitability Threshold Conditions under the Financial Services and Markets Act 2000. The Tribunal must apply the regulatory rules as made. It has no jurisdiction on such a reference to disapply or modify them because the applicant considers them disproportionate or inappropriate.

Przemyslaw Soszynski t/a Phenix Consultancy, a sole-trader claims management company, referred to the Tribunal the Financial Conduct Authority’s Decision Notice of 28 May 2021 refusing its application for permissions to conduct claims management activities.

The Authority relied on the effective supervision, appropriate resources and suitability Threshold Conditions in Schedule 6 to the Financial Services and Markets Act 2000. It alleged failures to provide information, inadequate insurance and prudential resources, deficient client-money and client-communication arrangements, and inadequate business-continuity arrangements.

The applicant contended that the requirements were disproportionate and discriminatory against him as a Polish national. The central issue was whether refusal of authorisation was a decision reasonably open to the Authority.

1. The Reference was dismissed. This was a non-disciplinary reference. Under section 133 of the Financial Services and Markets Act 2000, the Tribunal had to dismiss it unless its factual or legal findings showed that refusal was not reasonably open to the Authority. The Tribunal’s jurisdiction was supervisory. It could not substitute its own view of the reasonableness or proportionality of the Authority’s rules.

2. The Authority discharged its initial burden, on the balance of probabilities, of showing that it could not ensure that the applicant would satisfy and continue to satisfy the relevant Threshold Conditions. The applicant had repeatedly failed to meet information deadlines, challenged the legitimacy of requests, and left important information outstanding. Those matters showed that the Authority could not expect adequate, timely, open and co-operative provision of information. The applicant therefore failed Threshold Condition 2C.

3. The applicant also failed Threshold Condition 2D. He had not demonstrated adequate professional indemnity insurance or prudential resources. His arrangements for client money, recorded telephone communications and complaints, client documentation, and business continuity were inadequate. His limited rights of audience were not explained sufficiently clearly to clients. Taken cumulatively, those failures showed inadequate financial and non-financial resources, systems and controls to protect consumers.

4. The same matters, together with the applicant’s persistent resistance to regulatory obligations and unfounded abusive allegations against public bodies and staff, established that he was not fit and proper to manage a regulated claims management business. He had not shown that he was ready, willing and organised to comply with regulatory standards, as required by Threshold Condition 2E.

5. The discrimination allegations lacked an evidential foundation. The asserted comparison with another applicant did not establish discrimination or show why this applicant met the Threshold Conditions. The Authority’s decision was within the range reasonably open to it.

• Upper Tribunal (Tax and Chancery Chamber): dismissed the reference from the Financial Conduct Authority’s Decision Notice of 28 May 2021 refusing authorisation.