Upper Tribunal Tax and Chancery Chamber

UT (Tax & Chancery) UT/2022/000100 and UT/2022/000107 - [2024] UKUT 00156 (TCC)

Fecha: 22-Mar-2024

The Privacy Applications

The Privacy Applications

Section 391 of the Act includes the following:

“(1A) A person to whom a decision notice is given or copied may not publish the notice or any details concerning it unless the regulator giving the notice has published the notice or those details.

(2)-(3) …

(4)

The regulator giving a decision or final notice must publish such information about the matter to which the notice relates as it considers appropriate.

(5)

…

(6)

The FCA may not publish information under this section if, in its opinion, publication of the information would be-

(a)

unfair to the person with respect to whom the action was taken (or was proposed to be taken),

(b)

prejudicial to the interests of consumers, or

(c)

detrimental to the stability of the UK financial system…”

The Authority is, therefore, obliged to publish such information in such manner as it considers appropriate, in relation to both Decision Notices, unless it considers that to do so would be unfair to Mr Burdett or Mr Goodfellow (as the case may be).

Schedule 3 to the Rules makes provision for procedure in financial services and wholesale energy cases. Paragraph 3 of Schedule 3 provides that the Tribunal must keep a register of references, which is to be open to inspection. Paragraph 3(3) of Schedule 3 provides:

“The Upper Tribunal may direct that the register is not to include particulars of a reference if it is satisfied that it is necessary to do so having regard in particular to any unfairness to the Applicant or prejudice to the interests of consumers that might otherwise result.”

10.

Whilst a decision by the Authority to publish a decision notice is not a matter which can be referred to the Tribunal, the Tribunal has jurisdiction to prohibit such publication pursuant to rule 14 of the Rules (on “Use of documents and information”), which provides:

“(1)

The Upper Tribunal may make an order prohibiting the disclosure or publication of—

(a)

specified documents or information relating to the proceedings; or

(b)

…

(2)

The Upper Tribunal may give a direction prohibiting the disclosure of a document or information to a person if—

(a)

the Upper Tribunal is satisfied that such disclosure would be likely to cause that person or some other person serious harm; and

(b)

the Upper Tribunal is satisfied, having regard to the interests of justice, that it is proportionate to give such a direction.”

11.

The principles to be applied in deciding whether to direct that a reference is not to be included in the register or to prohibit disclosure of a decision notice have been discussed in a number of cases, which are helpfully summarised by Judge Redston in Fox-Bryant v FCA, [2023] UKUT 000224 (TCC) at [39]:

‘(1) FSMA s 391 gives rise to a presumption that Decision Notices will be published, albeit there must be regard to the fact that a Decision Notice under challenge in the Upper Tribunal is necessarily provisional (Prodhan at §20(1)).

(2)

The exercise of the Tribunal’s power to prohibit publication is a “matter of judicial discretion to be considered against this presumption” (Prodhan at §20(2)).

(3)

The exercise of this discretion involves a balancing exercise of all relevant factors and giving effect to the overriding objective of dealing with cases fairly and justly (Prodhan at §20(3)).

(4)

The open justice principle is to be applied such that the starting point is a presumption in favour of publication in accordance with the strong presumption in favour of open justice generally (PDHL at §36(1)).

(5)

The onus is on the applicant to demonstrate a real need for privacy by showing unfairness (PDHL at §36(2)).

(6)

The scales are thus heavily weighted in favour of publication. In order to tip the scales, the applicant must produce cogent evidence of how unfairness may arise and how it could suffer a disproportionate level of damage if publication were not prohibited (PDHL at §36(3)).

(7)

A ritualistic assertion of unfairness is unlikely to be sufficient. The embarrassment to an applicant that could result from publicity, and that it might lead the applicant's clients and others to ask questions which the applicant would rather not answer, does not amount to unfairness (PDHL at §36(4)).

(8)

If it is established by cogent evidence that publication of a Decision Notice would result in the destruction of, or severe damage to, a person’s livelihood, it would be unfair to publish that Notice (PDHL at §37, citing Angela Burns v FCA [2015] 5 UKUT 0601 (“Burns”) at [89]).

(9)

A “possibility” of severe damage or destruction is not enough; there must be a “significant likelihood” of such damage or destruction occurring (PDHL at §37, citing Burns at [90]).

(10)

An applicant is not required to show that damage or destruction is an inevitable consequence (PDHL at §37).

(11)

A risk of damage to reputation in unlikely to be sufficient to justify a prohibition on publication (Prodhan at §22).

(12)

The nature of the dispute, including questions as to whether the applicant has been treated fairly in comparison with others, or penalised too harshly, are matters to be considered by the Tribunal when it hears the substantive reference and are not matters that can bear upon the question of publication (Ford at [50]).

(13)

The fact that some information concerning the subject matter of a reference is already in the public domain is a factor which tends in favour of publication (Ford at [54]).

(14)

The protection afforded to an applicant who is concerned that readers of the decision notice might not understand its provisional nature is to refer the matter to the Tribunal (Prodhan at [26]). That paragraph is followed by this citation from Arch:

“50…..Mr Stanley…submits that it is likely that there will be an unreasonable body of investors, fuelled by high emotions as a result of what has happened to the Arch cru funds, who will fail to appreciate that the decisions are provisional and will assume that the Applicants are guilty of what is alleged.

51.

The protection to which the Applicants are entitled in this situation is the right to have the allegations tested in this Tribunal which will in due course deliver a decision in public which will refute unfounded allegations. In addition the Decision Notices themselves set out in detail a summary of the representations that the Applicants made to the RDC which goes some way to explaining their side of the case. No doubt the media will be interested in hearing from the Applicants why they believe the allegations are unfounded.”’

12.

In support of his Privacy Application Mr Goodchild says that the effect of the reference being public knowledge would be to ruin his reputation and harm his livelihood. Discretionary investment management is Mr Goodchild’s “stock in trade” and he has had to step back from this because of the reference. He is not working in the financial services industry at present. Westbury was effectively closed down and Mr Goodchild had no alternative but to put it into voluntary liquidation. He has stepped back from the financial services industry because he is unable to get a job in it as a result of the stigma that will attach to him between now and the substantive hearing. If he applied for a job in the financial services sector, he would need to disclose the existence of these proceedings and that would mean that he would not be offered the job. He explained in his skeleton argument how he feels that he has been badly treated by the Authority in its investigation and, if the reference were made public, he would need to “go public” with his criticisms of the Authority in order to defend himself.

13.

Mr Burdett endorsed Mr Goodchild’s submissions from his position. He submitted that the allegations made against him are untrue and that it would be unfair to publish them before the reference is substantively disposed of. He says that people will say there is “no smoke without fire” and so, even if his reference is successful, people will pick up on the Authority’s actions and this will be detrimental to his career for the rest of his life. Mr Burdett suffered a heart attack in 2023 and he is currently not working.

14.

Mr Temple submitted that, beyond their statements as to the effect of publicity on them, the Applicants had not suggested that publishing the Decision Notices would cause severe damage to their livelihoods and they have not produced any evidence (let alone cogent evidence) of severe harm to them of any kind being likely to result from publication of the Decision Notices.

15.

Each of the Applicants is, understandably, concerned about the impact on him of the Decision Notice relating to him being made public. It is an inevitable feature of litigation of all kinds that disagreeable things (including untrue allegations) may be said about parties and witnesses. As a general rule, the courts have tended to regard that as an acceptable price to be paid for open justice. That is why, as Judge Redston observed in Fox-Bryant, the presumption is that decision notices will be published. In Khuja v Times Newspapers Ltd, [2017] UKSC 49, the claimant sought an injunction preventing the publication of information referred to in open court likely to lead to his identification as a person who had been arrested (and subsequently released without charge) during a criminal investigation into child abuse. The Supreme Court held the order sought should be refused. Lord Sumption observed at [34(2)]:

“[T]he impact on PNM’s family life of what was said about him at the trial is no different in kind from the impact of many disagreeable statements which may be made about individuals at a high profile criminal trial. A defendant at such a trial may be acquitted, possibly on an issue of admissibility, after bruising disclosures have been made about him at the trial. Within the limits of professional propriety, a witness may have his integrity attacked in cross-examination. He may be accused by other witnesses of lying or even of having committed the offence himself. All of these matters may be exposed in public under the cloak of the absolute immunity of counsel and witnesses from civil liability, and reported under the protection of the absolute privilege from liability for defamation for fair, accurate and contemporaneous publication. The immunity and the privilege reflect the law’s conviction that the collateral impact that this process has on those affected is part of the price to be paid for open justice and the freedom of the press to report fairly and accurately on judicial proceedings held in public.”

16.

Our starting point, therefore, must be the principle of open justice, and with it a presumption in favour of publication. This was recently emphasised, in the context of an application for proceedings in the Tax Chamber of the First-tier Tribunal to be heard in private, by Bacon J (the President of this Chamber of this Tribunal) and Judge Thomas Scott in HMRC v The Taxpayer, [2024] UKUT 00012 (TCC). An assertion by an applicant of unfairness in publishing a decision notice (even when augmented, as it is here, by the Applicants’ criticisms of the Authority’s behaviour) is unlikely to be sufficient. The embarrassment to an Applicant that could result from publicity, in particular that it might lead to people asking questions or voicing criticisms which the applicant would rather not answer, does not amount to unfairness. All the issues and criticisms raised by the Applicants can be ventilated at the substantive hearing and, if an Applicant’s reference is successful, there will be a public decision that vindicates their position.

17.

Something which might (if established by cogent evidence) make it unfair to publish a decision notice would be where publication would result in the destruction of, or severe damage to, a person’s livelihood. No evidence was led before me to support any assertion that publication of the relevant Decision Notice would destroy, or severely damage, an Applicant’s livelihood. Neither of them is working in the financial services industry at the moment, and Westbury has been closed. As Mr Goodchild explained, it would be impossible for either of the Applicants to get a job in the financial services industry at the moment because of the need to disclose these proceedings. The Authority’s actions to date have, no doubt, impacted on the Applicants’ livelihoods, but I cannot see how publication of the Decision Notices would make their current position any worse, let alone sufficiently seriously to outweigh the presumption in favour of publication.

18.

For these reasons I will dismiss the Privacy Applications.