UT (Tax & Chancery) UT-2024-000010 - [2024] UKUT 00416 (TCC)

Mr Cherry argued that publication of the Decision Notices would have a detrimental impact on the reputation of the Applicant. He acknowledged that there is some inevitable reputational damage to be associated with any litigation. As per Eurolife Assurance Company Limited v FSA (26 July 2022, Case 001) at [47]) and R. (Todner) v Legal Aid Board [1999] QB 966 (at [8]):

“…parties and witnesses have to accept the embarrassment and damage to their reputation and the possible consequential loss which can be inherent in being involved in litigation. The protection to which they are entitled is normally provided by a judgment delivered in public which will refute unfounded allegations. Any other approach would result in wholly unacceptable inroads on the general rule”.

He submitted that this litigation is however marked by the circumstances referred to in interparty correspondence and in the Personal Statement of the Applicant which demonstrate characteristics to this litigation which impact the Applicant in an adverse manner. The prospect of reputational destruction of the Applicant is particularly significant in the context of her mental health issues and the characteristics of ASD that she displays and are outlined earlier in argument and evidence.

Mr Cherry relied on the fact that the Applicant was, on the Authority’s own case, not under investigation until September 2021. Despite that fact she was subjected repeatedly to the investigatory powers of the Authority between 2017 and September 2021 and responded to multiple Information Requirements imposed on her and was not kept up to date by the Authority, ostensibly, as she was not under investigation. The focus of those interactions with the Authority was on her conduct and the work she carried out as an appointed representative. While the Authority denies this, it was clearly investigating her conduct throughout the period, including appointing Grant Thornton to conduct file reviews of her files, all before the Authority claims it was investigating the Applicant.

Mr Cherry suggested that the Applicant describes how she took significant pride in her work and has described the impact on her of the Authority’s ‘non-investigation’ of her. In her Personal Statement (B/21) at [14 and 15]:

“Please bear in mind that throughout this period I was effectively a witness in the investigation into FSML. I had suffered a period of voluntary suspension and then been theoretically reinstated in 2018. The FCA refused requests for any explanation or update on the basis I was not under investigation. This total lack of clarity caused immense additional stress to me which worsened my anxiety and depression. This all took a significant toll on me – my work and the pride I took in it for many years had been taken away, without explanation or update from the FCA. I lost my business and companies as a result of not being able to secure regulated work in my field while the FCA investigated FSML. I was in a state of limbo and unable to influence the outcome or even to have any meaningful idea of what was happening at the FCA while my life was on hold for years on end..”

The Applicant goes on to describe the significance of her work to her in her personal statement at [18]:

“My work has been a source of pride to date, and it has really helped me to try and focus on more positive things. To be labelled as someone who lacks integrity pains me immensely and causes me to question my existence and purpose in life. The thought of the world being told by the FCA in a Decision Notice that I am not to be trusted, and that I am thoroughly incompetent, before I have had the chance to try and clear my name in the Upper Tribunal sends me into a spiral of anxiety and despair. I have felt like an afterthought for several years while the FCA did its investigations …”

Mr Cherry submitted that the Decision Notice makes the most serious of allegations about the character and competence of the Applicant. It alleges integrity failings and a severe lack of competence on the part of the Applicant in a detailed manner. In such circumstances, it is inevitable that serious reputational harm will be visited on the Applicant by publishing the Decision Notices. It is clear from the Applicant’s evidence and that of her medical and psychological professionals, that the Applicant is very concerned with her work and has hyperfocus issues which exacerbate her perception of such criticism. It is also clear, given the clear evidence before the UT, that such publication of such criticisms would have an adverse effect on the Applicant’s mental health.

He contended that in the context of this matter therefore, whilst the impact of reputational destruction alone may not be seen as sufficient reason not to publish the Decision Notice, in combination with other factors, particularly the mental health situation of the Applicant, the balancing exercise is in this case, in favour of not publishing the Decision Notice.