Nailesh Manubai Teraiya v The Financial Conduct Authority

Where a regulator withdraws only one element of enforcement action in a decision notice while maintaining another, it need not issue a notice of discontinuance under Financial Services and Markets Act 2000, section 389. A discontinuance notice is required where the regulator decides not to take any of the action to which the notice relates.

After a reference to the Tribunal, withdrawal of all or part of a party’s case requires notice and the Tribunal’s consent under rule 17. Consent may be made conditional on appropriate publication to ensure fair and just case management. A proposed issue concerning an abandoned penalty is academic where the Tribunal has no freestanding jurisdiction to determine or remedy the alleged equality-law breach.

The Financial Conduct Authority sought permission to amend its statement of case so that it would no longer pursue a financial penalty against the applicant, while continuing to seek a prohibition order. It also sought to narrow a listed preliminary issue under the Equality Act 2010 so that it concerned the prohibition only.

The applicant objected. He contended that withdrawing the penalty required a notice of discontinuance under section 389 of the Financial Services and Markets Act 2000, that the Authority had not followed its publication policy, and that the amendments were internally inconsistent. He also submitted that the equality issue concerning the penalty remained live. The Tribunal considered the applications alongside its earlier preliminary-issue decision, [2025] UKUT 00034 (TCC).

1. The Authority was granted permission to amend its statement of case and the preliminary issue was amended. The Authority could cease to pursue the financial penalty while continuing to seek a prohibition order.

2. Section 389 of the Financial Services and Markets Act 2000, properly construed, requires a notice of discontinuance only where the regulator decides not to take any of the action to which a decision notice relates. The statutory reference to “the action”, and the provision’s location under “conclusion of proceedings”, supported that construction. The proceedings continued because the Authority maintained the prohibition action.

3. The Tribunal rejected the Authority’s alternative submission that a discontinuance notice could be served only after permission to amend. If section 389 applied, its mandatory language was not displaced by a reference to the Tribunal. The Tribunal also rejected the submission that section 133(5) gave it sole responsibility for all action after a reference.

4. Withdrawal of the penalty was instead a withdrawal of part of the Authority’s case under rule 17 of the Tribunal Procedure (Upper Tribunal) Rules 2008. The Authority should have served a notice of withdrawal with its amendment application. That procedural failure caused no prejudice because permission to amend and consent to withdrawal depended on the same discretionary considerations. The Authority was directed to serve the notice within seven days.

5. The Tribunal could not generally supervise the Authority’s publication policy. However, as a condition of consent under rule 17(2), fair and just case management required an undertaking to publish the decision not to pursue the penalty. Permission to amend would take effect only when the Tribunal expressly consented to withdrawal.

6. Once the penalty was withdrawn, the question whether the Authority had acted as a qualifications body when imposing it was academic. The Tribunal had no freestanding jurisdiction under the Equality Act 2010 to determine or remedy a historic alleged breach concerning an issue no longer before it. The preliminary issue was therefore confined to the prohibition, although evidence concerning the penalty might still be relevant if discrimination concerning the prohibition were established.

• Upper Tribunal (Tax and Chancery Chamber): This procedural decision amended an earlier direction concerning a preliminary issue, published as [2025] UKUT 00034 (TCC).