Diverse World

Financial Services and Markets

STEPHEN OLIVER QC believes that his new tribunal, launched at the end of last year, will be handling some very large cases.

Not another tribunal for Leggatt's Ark? Yes, but at least the new Financial Services and Markets Tribunal replaces six or more old ones.1 I was delighted to be asked to write about it.

The Financial Services and Markets Tribunal covers the whole of the UK. It was established by the Financial Services and Markets Act 2000. The Act came fully into force on 1 December 2001. It gave the Financial Services Authority (FSA) responsibility for the regulation of most financial services. It provides that all the regulatory and disciplinary decisions of the FSA can be referred to the new tribunal, which replaces those numerous tribunals of the previous financial regulators.

The FSA has been called the most powerful regulator in the world and the new tribunal is there to provide an independent, impartial and judicial oversight of its decisions.

The launch of the new tribunal
The new tribunal was launched by Rosie Winterton MP, Minister with responsibility for Tribunals at the Lord Chancellor's Department, at a reception held at Bedford Square, the home of the new tribunal, on 30 November 2001. The Secretary of the Tribunal, Dick Lester, is also Clerk to the Special Commissioners and Registrar of the VAT and Duties Tribunals. All three tribunals share president, premises and administration. They are referred to for convenience as the Finance and Tax Tribunals. This foreshadows the group of 'Finance Tribunals' recommended in the Leggatt Report.

How is the new tribunal constituted?
The Act provides that there is to be a president, a panel of legally qualified chairmen and a panel of lay members all appointed by the Lord Chancellor. The Lord Chancellor appointed me as president; he has appointed seven other legally qualified chairmen and 19 lay members. All the lay members were selected for their experience in financial services. Chairmen and members are drawn from all parts of the UK.

First training seminar
Our Training Committee met as soon as we had all been appointed. The Committee organized our first training seminar which was held on 10 December 2001 when all the new chairmen and members were able to meet for the first time. We heard from those at the FSA who will be making the decisions that might be referred to us and they told us how their procedures will operate. We also heard about the background to the Act and especially those parts of it which were relevant to our case studies.

We discussed our rules and procedure and then considered two case studies, one on authorisations and one on market abuse. The seminar was welcomed by all those who attended. We intend to hold regular training seminars in the future on specific points of interest.

What type of cases will the tribunal decide?
We will deal with a wide range of references made by financial service providers including banks, building societies, insurance companies, investment and pension advisers, stockbrokers, fund managers, investment exchanges and clearing houses. They will typically relate to decisions made by the FSA about disciplinary matters, authorisations, official listings, and permission to carry on regulated activities. Some will involve long hearings and will put the financial industry under the microscope. Others will be rapid reaction cases where traders are threatened with imminent 'suspension'. And there will be 'market abuse' references where the applicant may be an individual operating alone and with no financial services business behind him.

What procedure will the tribunal adopt?
As provided by the Act, the Lord Chancellor has made the tribunal's Rules (The Financial Services and Markets Tribunal Rules 2001 SI 2001 No. 2476). These govern the procedure before the tribunal. There is one rule in particular that has already caused some interest and that is the rule that normally all hearings are in public. It was this provision that caused the Regulations to be debated in the House of Lords. As the rule now stands the tribunal has power to direct that a hearing should be in private if all the parties apply and the tribunal is satisfied that a hearing in private would not prejudice the interests of justice. The tribunal also has power to direct a hearing in private if one party applies and the tribunal is satisfied that a hearing in private is necessary having regard to a number of stated factors including the interests of consumers. It will be interesting to see how this rule is applied by the tribunal in individual cases.

The tribunal has a limited power to award costs. The Act provides that costs may be awarded against any party who has acted vexatiously, frivolously or unreasonably and that costs may be awarded against the FSA if the tribunal considers that the decision of the FSA was unreasonable. The Act also provides that appeals from decisions of the tribunal are to the Court of Appeal on a point of law.

Legal assistance for market abuse cases
Since it is possible that allegations of market abuse which might attract penalties under the Act could be regarded as criminal offences for the purposes of the Convention on Human Rights, special Regulations have been made which provide for legal assistance to be made available to applicants in such hearings. Legal assistance may be granted if the applicant meets a number of general criteria and is also eligible financially. The legal assistance scheme will be funded from a levy raised by the FSA from the financial community.

The future
It is too early to predict the volume of cases that the tribunal will have to handle. On present indications, there will be some very large ones.

STEPHEN OLIVER QC is President of the Financial Services and Markets Tribunal and of the VAT and Duties Tribunals. He is also the Presiding Special Commissioner.

(1) These include the Financial Services Tribunal, the Banking Appeals Tribunal and the first instance and appellate tribunals of the three Self-Regulatory Organisations (the Personal Investment Authority, the Investment Management Regulatory Organisation and the Securities and Futures Authority).

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Immigration Services

SEDDON CRIPPS describes the way in which immigration advisers are regulated.

The Immigration Services Tribunal was set up by the Immigration and Asylum Act 1999 in response to a perception that there were a growing number of individuals providing advice and guidance to those seeking asylum outside any of the existing systems of regulation or control.

Part V of the Act (which came fully into force on 30 April 2001) set up a new system of control for immigration advisers and immigration service providers. The Act made provision for the appointment of the Immigration Services Commissioner, currently John Scampion, and set out his general functions. Immigration advisers and immigration service providers, who are not members of a designated legal body, must register with the Commissioner or be exempted by him from registration.

Those immigration advisers and service providers who have registered with the Commissioner must fulfil the requirements of good practice set out in a set of also been developed, as has Guidance to Advisors, all of which have been issued by the Commissioner since his appointment. The Commissioner must also investigate complaints made against such advisors or service providers.

Tribunal
The Immigration Services Tribunal, also set up by the 1999 Act, hears appeals by persons refused registration or whose exemption is withdrawn. It also hears disciplinary charges laid against registered or exempt persons by the Immigration Services Commissioner. It covers the whole of the UK.

The new Tribunal came into existence in October 2000. As well as appointing me as the first President, the Lord Chancellor has appointed five other legally qualified chairmen and eight lay members. All the lay members have substantial experience in immigration services or in the law and procedure relating to immigration. Chairmen and members are drawn from all parts of the UK and all work on a part-time basis.

Tribunal procedure
The Immigration Services Tribunal Rules 2000 (SI 2000 No. 2739) were the subject of consultation during the second half of 2000. Governing procedure before the tribunal, they include a power to suspend the decision appealed against until the substantive hearing. We also have the power to make an interim order prohibiting or restricting a person's right to provide immigration advice or services pending the hearing of a complaint against him, but none to award costs. The Act provides no right of appeal from the decisions of the tribunal.

Appellants and persons charged are entitled to be represented by a qualified lawyer or, with the permission of the tribunal, any other person. The tribunal has also produced an explanatory leaflet for litigants.

Training
Our first training conference was held in June 2001, when all the new chairmen and members were able to meet for the first time. A session on the Immigration Appeal Authority included a visit to their premises at Hatton Cross to observe hearings and speak to adjudicators. We also visited London Heathrow airport to observe how immigrants arrived and were dealt with by immigration officers at ports of entry and were able to discuss the whole area of immigration with senior immigration officers. Sessions on the second day were on the Immigration Services Commissioner, human rights (including group exercises) and a general discussion on the role and procedures of the Tribunal.

During a second training day in January 2002, we heard from the staff of the Office of the Immigration Services Commissioner (OISC) on the processing of registration applications. We heard from members who had taken part in appeals, had more human rights training and discussed the tribunal's progress. We intend to hold annual training days and to have extra training when necessary on any point of special interest.

Case law
We have received eight appeals against refusal of registration and one disciplinary charge against a registered person. We have received applications to suspend the Commissioner's decision and an application to prohibit a registered person from practice pending the hearing of the complaint against him. We aim to decide these interim applications as soon as possible and to hear appeals and disciplinary charges between eight and 10 weeks after receipt. We are in the process of setting up our website. Decisions will also appear on the Commissioner's website where there has been a decision on contested issues.

The future
We expect to receive about 10 to 12 cases a year. As time passes and our approach becomes clear, it is possible that that number will fall.

JUDGE SEDDON CRIPPS is the President of the Immigration Services Tribunal.