23rd August 2010
Take 2 beers and jump?
Does anyone remember "Your Life in Their Hands"?
It was a long-running BBC sixties TV documentary series on the subject of surgery examining surgical practice from the point of view of both surgeons and patients. There was an early 1970s revival (the first in colour) presented by Jonathan Miller.
You may find from some information received this week a similar forensic approach being applied to regulation thus giving us all a greater understanding of how the process of regulation and statute led to the formation of the FOS, and how the powers it was given came about.
The Minutes Of Evidence Taken Before The Joint Committee On Financial Services And Markets on Thursday the 15th April 1999 is a date that all IFAs should remember.
I am not sure what the collective description is for a gathering of Ombudsmen but it is clear that there were very serious concerns from at least one while giving evidence over the future impact the Human Rights Act would have and in particular Articles 6 and 7.
Lord Lester of Herne Hill referred to the Human Rights Act as follows. "These are not alien, foreign, curious European standards; the standards in Article 6 of the Human Rights Convention were drafted by British legal civil servants reflecting ancient British principles of natural justice and fairness and Article 6 is described in Strasbourg as the "British" Article of the Convention".
Lord Lester laid out a number of concerns in regard to the conduct of the FSA. In particular, he said- "Firstly, I doubt very much whether the statutory immunity from liability which the FSA will enjoy will pass muster under Article 6 of the Convention. Similar immunities have been struck down and I doubt whether that one will stand".
"Secondly, the combination of an FSA power to fine and to use the fine as a clawback for its legal costs seems to me to be wrong in principle. It is improper to use a fine for that purpose and I am sure that anyhow that process should be done by the independent tribunal and not by the FSA themselves who will be self-interested".
"Thirdly, I am worried -- and here I refer to my colleague Charles Flint QC's lecture which the Committee will have been provided with -- I am worried, as he is, by what he calls plea bargaining, the pressure upon a person to plead guilty and submit to a massive fine rather than to appeal. I simply remind the Committee that that European principle of "equality of arms", as it is called, says that you must not put a person into an unequal position vis-a-vis an authority like the FSA".
"Fourthly, I think that giving the FSA the extraordinary power under Section 55(2) to decide the scope of tort liability between who are to be the private persons who can sue seems to me to be a quite extraordinary power to give to a body that is not Parliament or a Minister. That just seems to me constitutionally improper".
"And lastly, like Charles Flint QC, I think the principle of legal certainty applies not only if the proceedings are classified as criminal in substance for the purposes of Article 6 safeguards but even if they are civil because here people's civil rights to property and to reputation are going to be determined by the FSA at the first instance and that triggers the requirements of fairness and equality in civil proceedings as well as in criminal proceedings".
Andrew Whittaker, Deputy General Counsel of the Financial Services Authority at a meeting of the Committee said in evidence "We are committed to securing the highest standards of fairness in the way in which we operate. We are, therefore, committed to ensuring that we are complying with ECHR and with the ordinary principles of English justice. We are also committed to doing so in a way that is speedy and effective".
The Committee discussed a number of issues and you should click on the links below to explore these then ponder, given the quality of evidence, that we are where we are today with regulation, the FSA and the FOS.
The issues discussed include statements such as this from Lord Taverne:
I am very worried about the application of Article 6 in the light of what we heard earlier and the fact that there appear to be some legal opinions which suggest that there may be conflict between the section dealing with the Ombudsman and Article 6. I am worried about it because, like you, I very much hope that it will be possible to retain the informal approach and keep the law out of it as far as possible.
I have got certain questions.
First, have you had a legal Opinion?
(Mr. Dean- the Investment Ombudsman at the time) We have seen a legal Opinion. I would be amazed if we could not find a way of getting it to you
(Mr. Holland- the PIA Ombudsman at the time) I think I have got six opinions which, not surprisingly, do not exactly agree. I can certainly let you have the opinion that my own bureau obtained because that is our property.
I think it would be very useful for us if we could have one!
The second question is have you had any difficulties with the Convention in the past because this problem is not going to be new unless there are special provisions in this Act which did not exist in the past which raise the question?
(Mr. Dean) No. I think with one exception we have not in the past. The reason is that our schemes have not had the characteristic of being binding and compulsory, it is that feature. I think that the PIA Ombudsman is different in that respect.
(Mr. Holland) I have always been exposed technically to the risk of someone eventually going to Strasbourg and enforcing their Article 6 rights by that route because I am both binding and compulsory. It is those two features that bring Article 6 into play.
The point of processes such as these is to ensure fairness for all- the consumer and the regulated entities.
We are going to see a new regulator, the CPMA, and so it is vital that this fifth regulator is correctly constituted and is allowed to exercise its powers both fairly and reasonably. Let's hope that those writing the rules and giving it life learn from past experiences, consult fully with ALL interested parties to avoid another regulatory "Frankenstein" being created
Article 6 - Right to a fair trial
1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.
2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights:
- to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
- to have adequate time and facilities for the preparation of his defence;
- to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
- to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
- to have the free assistance of an interpreter if he cannot understand or speak the language used in court.
Article 7 - No punishment without law
1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.
This article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles of law recognised by civilised nations.
Click on the links below, kindly researched by IFA Alan Lakey, read, digest and then take 2 beers from the fridge and head for the nearest escape chute!!!
Question Numbers 433 - 439 440 - 459 460 - 464
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