In this case report we consider the Court of Appeal's judgment in Jeffery v FCA [2016] EWCA Civ 187 (19 January 2016).
The Court of Appeal refused an application for an appeal against a previous decision made by the Upper Tribunal (Tax and Chancery Chamber). The basis for this application for appeal was that the former chair of the FSA's Regulatory Decisions Committee (RDC) had since become a tribunal judge. The applicant alleged that there was a real possibility that the tribunal had been biased against him for this reason. The Court of Appeal rejected the application for appeal on the basis that the judge in question had not been involved in hearing the tribunal reference in question, and there was no evidence for any assertion of bias.
Background
In June 2013, the Upper Tribunal (Tax and Chancery Chamber) published its decision in Andrew Jeffery v FCA (FS/2010/0039) in which it upheld a series of findings made by the FSA (the then regulator) against Mr Jeffery. In particular, the tribunal found that Mr Jeffery had breached Principles 1 (acting with integrity) and 4 (being open and co-operative with the regulator) of the FSA's Statements of Principle for Approved Persons (APER) by:
The tribunal imposed a penalty of £150,000 on Mr Jeffery.
Initial allegation of bias
Prior to the tribunal hearing (which took place on dates in December 2012 and January 2013), Mr Jeffery had objected to any of the tribunal judges hearing his reference on the grounds that there was a real possibility of bias. The basis for Mr Jeffery's objection was that Judge Herrington, who had been chair of the FSA's Regulatory Decisions Committee (RDC) when Mr Jeffery's case was heard, had subsequently become a tribunal judge. He shared an office with Judge Berner, who was the tribunal judge assigned to his case. Mr Jeffery argued that:
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The fact that Judge Herrington and Judge Berner shared an office gave rise to a real possibility of bias.
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The physical proximity of the other tribunal judges in the same building should disqualify them from hearing his reference for the same reason.
The tribunal dismissed Mr Jeffery's allegations on the basis that the circumstances would not be regarded by the fair-minded and informed observer as giving rise to any real possibility of bias.
Jurisdiction of the Court of Appeal
An application to appeal a tribunal decision may only be made to the Court of Appeal if such an application has been made to, and rejected by, the tribunal (section 13, Tribunals, Courts and Enforcement Act 2007).
After the tribunal dismissed Mr Jeffery's allegations regarding bias, Mr Jeffery had failed to request permission from the tribunal to appeal its decision. As a result, the Court of Appeal did not have jurisdiction to give permission to appeal the tribunal's decision relating to Mr Jeffery's allegations regarding bias.
In those circumstances, the Court of Appeal determined that it was not open for Mr Jeffery to appeal the tribunal's decision relating to his allegations regarding bias on the ground that its decision was erroneous in law. Rather, Mr Jeffery could only challenge the tribunal's decision by alleging that Judge Herrington's presence at the tribunal's premises after the decision was taken gave rise to the possibility of bias and should be considered in determining any question of permission to appeal to the Court of Appeal.
Judgment
The test that the Court of Appeal applied was whether the fair-minded and informed observer, having considered all the facts, would conclude that there was a real possibility that the Upper Tribunal was biased. The Court of Appeal added that such an observer "will adopt a balanced approach, neither complacent nor unduly sensitive or suspicious".
The Court of Appeal rejected Mr Jeffery's application for appeal on the following grounds:
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The fact that Judge Herrington was appointed as a judge of the tribunal when he had previously been chair of the RDC would not cause the fair-minded observer to conclude that any tribunal hearing a case where the decision impugned was made during his chairmanship was not independent or impartial.
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Although it may have been inappropriate for Judge Herrington to handle Mr Jeffery's reference to the tribunal due to his previous role for the RDC, this did not mean that every other judge would have been unable to hear Mr Jeffery's reference.
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The tribunal had put certain safeguards in place when Judge Herrington became a judge. These safeguards precluded him from any involvement in cases in which he had been involved when chair of the RDC or where the RDC made a decision during his chairmanship.
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There was no evidence for any assertion that Judge Herrington either did or sought to adversely influence the judge who heard Mr Jeffery's reference to the tribunal. The fair-minded observer would not, in the absence of any specific evidence, assume or suspect that Judge Herrington or any of the other judges would be mindless of their judicial obligation of independence and impartiality.
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In any event, Judge Herrington had not been responsible for approving the warning and decision notices issued by the FSA to Mr Jeffery. Another member of the RDC panel had undertaken this task.
Comment
Based on the comments made about Mr Jeffery's submissions in the Court of Appeal's judgment, it appears that Mr Jeffery's allegations relating to bias may have been driven by the fact that he did not agree with the tribunal's decision in relation to his reference. As a result, it is perhaps unsurprising that his allegations of bias were rejected by the Court of Appeal.
Final notice
Jeffery v FCA [2016] EWCA Civ 187 (19 January 2016).
This article first appeared in Practical Law and is published with the permission of the publishers.
