Heather Moor And Edgecomb Ltd v Financial Services Authority, Court of Appeal - United Kingdom Financial Services and Markets Tribunals, May 19, 2008, [2008] UKFSM FSM059

Resolution Date:May 19, 2008
Issuing Organization:United Kingdom Financial Services and Markets Tribunals
Actores:Heather Moor And Edgecomb Ltd v Financial Services Authority

PERMISSION TO CARRY ON REGULATED ACTIVITIES Cancellation of Part IV permission Failure to comply promptly with FOS award Whether Applicant a fit and proper person FINANCIAL SERVICES AND MARKETS TRIBUNAL HEATHER, MOOR & EDGECOMB LIMITED Applicant - and FINANCIAL SERVICES AUTHORITY The Authority Tribunal: SIR STEPHEN OLIVER QC IAN ABRAMS COLIN SENIOR Sitting in public in London on 19 May 2008 Anthony Speaight QC for the Applicant Daniel Thornton and Dan Enraght-Moony, counsel, for the Authority © CROWN COPYRIGHT 2008 2 DECISION

1. The Applicant, Heather, Moor & Edgecomb Ltd ("HME"), have referred a Decision Notice dated 2 October 2007 informing it that, on the basis that it had failed to conform with an award made by the Financial Ombudsman Service ("FOS") dated5 13 October 2003 (in favour of a Mr and a Mrs Crofts, "the Crofts' FOS Award"), the Authority had decided to cancel its Part IV permission.

2. Shortly stated, the Authority's case is that the failure by HME to pay the Crofts' FOS Award means that the Authority cannot be satisfied that HME is a fit and10 proper person having regard to all the circumstances, and that HME is therefore failing and likely to fail to satisfy Threshold Condition 5. As a result, say the Authority, HME's Part IV permission should be cancelled.

3. HME says that nothing about its conduct in respect of the Crofts' FOS Award15 has rendered it not fit and proper in the relevant sense. HME relies further on the fact that, when sued for the Crofts' FOS Award by Mr and Mrs Crofts, the proceedings concluded with the claim being dismissed by consent; for the Authority to use its power to withdraw HME's Part IV permission would, it is argued, be in breach of the Rule of Law and of Article 1 of the First Protocol to the Convention on Human Rights20 ("Article 1P").

4. HME further argue that the Crofts' FOS Award is non-enforceable; there is no FOS register or, if so, the Crofts' FOS award was not entered in the register. We refer to this as "the absence of a FOS register argument".25 The Crofts' FOS Award

5. The Crofts' FOS Award was accepted by Mr and Mrs Crofts on 15 October

2003. Section 228(5) of Financial Services and Markets Act 2000 (and all further30 statutory references in this decision are to that Act) came into play and the award was binding on HME. The relevant Authority rule (DISP 3.7.12(1) R) requires prompt compliance with an award or direction of the FOS. (Prior to 6 April 2008 the relevant rule was DISP 3.9.14(1) R which also required prompt compliance.)

6. HME say they decided, having regard to the high cost of challenging the legality of the Crofts' FOS Award by way of judicial review, not to challenge it. On 6 January 2004 HME confirmed this by letter. The...

To continue reading