Individuals who were not called as witnesses
Individuals who were not called as witnesses
Mr Jaffey submitted that the Tribunal should draw adverse inferences from the absence of the following individuals who had not been called by the Authority to give evidence:
The PRA employees who were supervising the Bank after Mr Sutherland moved to another role in mid-October 2018. We discuss Mr Jaffey’s particular submissions at §404.
Mr Woods, a Director of the PRA, with whom Mr Arden had a conversation in January 2023. We set out the relevant extract at §435, and discuss it at §440.
Mr Vernon Hill, the Bank’s Chairman, and the non-executive members of the Board, see further §443ff.
Ms Sally-Ann James, the Bank’s General Counsel. We discuss her position at §§467-479.
In considering Mr Jaffey’s submissions about adverse inferences, we have followed the approach set out in Efobi v Royal Mail Group Ltd [2021] UKSC 33, [2021] 1 WLR 3863, where Lord Leggatt, with whom Lord Hodge, Lord Briggs, Lady Arden and Lord Hamblen agreed, said at [41]:
“The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.”
- Heading
- Introduction
- The jurisdiction of the Tribunal
- The burden and standard of proof
- The PRA and capital requirements
- The Bank’s lending
- CRE loans
- CLIP loans
- PBTL loans
- COREP reporting
- The Authority
- Listing Rule 1.3.3R
- The MAR
- The evidence
- Approach to the evidence
- Mr Arden
- Mr Donaldson
- Ms Gillan
- Ms Roberts
- Mr Somers and Mr Dransfield
- Mr Sutherland
- Mr Lane
- Mr Brierley
- Individuals who were not called as witnesses
- Findings of fact
- The early years
- Linklaters
- Key personnel during the period from March 2018
- Relationship with the PRA and the Authority
- 2016 and 2017
- The COREP audit and the CRE loans
- Mr Arden, the Board and the committees
- KPMG appointed
- April to June 2018
- July 2018
- The 2018 capital raise and half year results
- August 2018: PBTL and CLIP
- Communicating with the PRA
- KPMG decision trees
- PBTL classification
- Annual Review of Commercial Lending
- September Audit Committee
- September NEDs meeting
- September Board meeting
- Engagement of Deloitte
- Internal work in support
- Communications with the PRA
- Meeting with Linklaters
- Disclosure Committee meeting
- Mr Somers’ email
- Meetings with Mr Hill and Mr Bernau
- The October CRPAC meeting
- RWA Report
- Business and Commercial Lending
- The October Audit Committee meeting
- The Q3 Update
- Accounting, reporting and control report
- The October ROC meeting
- Chief Risk Officer’s Report
- The RWA Report
- Business and Commercial Lending Review
- The October Board meeting
- Linklaters Governance Update
- Audit Committee Update
- The Q3 Update
- 2019 Budget Paper
- Whether the RWA issue was discussed
- Chief Risk Officer’s Report
- Response to PSM Letter
- The Q3 Update and analyst calls
- Deloitte’s reports
- Discussions with Linklaters
- Discussions with the PRA and the January announcement
- Subsequently
- The PRA
- The Authority
- Mr Donaldson’s and Mr Arden’s careers
- The common ground
- The Parties’ cases
- The Authority’s case
- The Applicants’ case
- ISSUE ONE: WHETHER THE BANK BREACHED LR 1.3.3R
- The PRA and the COREP Returns
- Findings of fact
- The Applicants’ position
- The Tribunal’s view
- The PRA and confidentiality
- Findings of fact
- The Applicants’ position
- The Authority’s position
- The Tribunal’s view
- Mr Lane’s advice
- Findings of fact not in dispute
- Who was at the meeting
- How long was the meeting
- Linklaters’ practice when giving advice
- Knowledge of the impending Q3 Update
- What was said by Mr Arden at the meeting
- Confidential matter?
- The Tribunal’s finding
- The purpose of the meeting
- Reasonable to rely?
- Overall conclusion on legal advice
- No breach if uncertain and under investigation?
- Mr Jaffey’s submissions
- Mr Stanley’s submissions
- The Tribunal’s view
- No material breach if unknown
- The knowledge issue
- Key findings already made
- The Authority’s overall position on the knowledge issue
- The Applicants’ overall position on the knowledge issue
- Rules on classification
- Data issues
- Nature of the data issues
- Extent of the data issues
- Effect on materiality
- SME supporting factor
- Residential property
- Conclusion on data issues
- The mitigants overall
- The AIRB application
- Pillar 2A Offset
- Submissions
- Findings of fact
- Conclusion on Pillar 2A offset
- Phasing in
- PRA discretion
- Taking all the above into account
- Overall conclusion on the Knowledge Issue
- The PBTL Loans
- Findings of fact
- Submissions and the Tribunal’s view
- Whether the alternatives were unreasonable
- The Applicants’ position
- The Authority’s submissions
- The Tribunal’s view
- Reliance on the board and the Committees
- Findings of fact
- September
- October Audit Committee
- October ROC meeting
- October Board meeting
- The position of the parties
- The Tribunal’s view
- The Audit Committee
- The Board
- Reliance on Ms James
- Findings of fact
- Submissions
- Discussion
- Overall conclusion on Issue one
- The legal principles
- The statutory provisions
- Burton v Bevan
- Scandex
- Capital Alternatives
- Avacade
- Ferreira
- Submissions on Ferreira
- The words of the provision
- The ratio of Ferreira
- The corporate veil
- Forster: meaning of “knowingly concerned”
- Forster: reliance on legal advice
- The Applicants’ submissions
- The Authority’s submissions
- The Tribunal’s view
- The principles summarised and the issues remaining
- Mr Arden
- Mr Donaldson
- The position of the parties
- The Tribunal’s view
- ISSUE THREE: PENALTIES
- The Tribunal’s approach
- The DEPP
- The Authority’s position
- The Applicants’ position
- The Tribunal’s view
- The penalty framework
- Applying the Steps
- Step 2(1)-(3): Earnings
- The Tribunal’s view
- Step 2(4)-(7): Seriousness
- Step 3: Mitigation
- DEPP
- Submissions and discussion
- Co-operation
- Remediation
- Compliance with the PRA’s requirements
- Communications with the Authority
- No negative factors
- Other consequences
- Difference between the Applicants?
- Conclusions
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