Upper Tribunal Tax and Chancery Chamber

UT-2022-00097 - [2024] UKUT 00352 (TCC)

Fecha: 17-Sep-2024

Steps 2 to 5 - General

Steps 2 to 5 - General

89.

The essence of Mr Mansell’s submissions on the remaining Steps in the framework, were that:

(1)

There is a good and proper basis for the Tribunal to differentiate the assessment of seriousness in the Applicant’s case to that assessed by the Authority in the other cases where disciplinary action had been taken against firms who also participated in the Solo Business. Accordingly, at Step 2, the firm’s misconduct should be assessed at Level 3 rather than, as is contended for by the Authority, at Level 4.

(2)

There is no justification for the Authority’s decision, at Step 3, to aggravate the Applicant’s penalty by 10% on the basis that the Applicant had not followed the JMLSG guidance. On the contrary, the penalty should be mitigated by 10% at Step 3 on the basis that it involved compliance consultants to provide it with expert assistance.

(3)

There is no justification to apply a multiplier of 4 at Step 4 based solely on the basis that the absolute value of the penalty is too small in relation to the breach in order to meet the Authority’s objective of credible deterrence. On the contrary, the Authority’s actions against the other brokers demonstrates an inconsistency in the Authority’s treatment as between firms with regard to the imposition of a multiplier and the disproportionate treatment of the Applicant compared to those firms. In the circumstances, there is no justification for the application of a multiplier at all and the penalty without any multiplier is not as disproportionate as that currently proposed. Such a penalty is not small and credible deterrence is achieved both on its own merits and by reference to comparator cases.

(4)

Were the Tribunal to conclude that the Authority did not in the Decision Notice apply its own policy as set out in DEPP, and/or failed to follow precedent, the Tribunal may conclude that the Applicant has been denied the opportunity to settle the case on the terms which the Authority should have offered it and the Applicant has been put to unnecessary legal expense, inconvenience and considerable stress and anxiety over the course of a number of years.

90.

At our request, Mr Mansell’s junior, Mr Coke-Smyth, helpfully provided a table setting out various calculations as to the result that would follow if we were to accept some or all of Mr Mansell’s submissions.

91.

As set out in the Decision Notice, the application of Step 2, at Level 4, produced a figure of £67,296, being 20% of the Applicant’s relevant net revenue in the Relevant Period. The application at Step 3 of an aggravating factor of 10% increased the Step 2 figure to £74,025. The application of a multiplier of 4 at Step 4 produced a figure of £296,100 for the penal element of the overall penalty.

92.

If we were to accept Mr Mansell submissions, the result would be a figure of £44,864 at Step 2, being 10% of the Applicant’s relevant net revenue in the Relevant Period. The application at Step 3 of a mitigating factor of 10% would decrease the Step 2 figure to £40,000. As a result of applying no multiplier at Step 4, the penal element of the overall penalty would remain at £40,000. No further reduction was proposed in relation to the loss of opportunity to settle the case.

93.

Against that background, we now turn to consider Mr Mansell’s submissions on Steps 2 to 5.