FSA’S POWERS TO REQUIRE PRODUCTION OF DOCUMENTS – NEW COURT OF APPEAL JUDGMENT

Posted on | by Anya Proops KC

The Court of Appeal has today handed down an important decision on the nature and scope of the FSA’s powers to require production of documents under the Financial Services and Markets Act 2000 (FSMA), Financial Services Authority & Ors v Amro International & Ors [2010] EWCA Civ 123. The case involved a request made to the FSA by the United States Securities and Exchange Commission. The Commission had instituted proceedings in the United States alleging fraudulent and manipulative trading in the shares of a US company. Pursuant to a multilateral memorandum of understanding concerning the exchange of information (the Memorandum), the Commission sent to the FSA a letter requesting the FSA’s assistance in obtaining the production of documents from a London-based accounting firm (G) which acted for two companies implicated in the US litigation. In response to the request, the FSA appointed investigators under the FSMA and the investigators issued notices to G pursuant to s. 171 and/or s. 172 FSMA to produce the documents and information described in the Commission’s request. Overturning the judgment of the High Court, the Court of Appeal held that the FSA’s actions in appointing investigators and issuing the notices were lawful under the FSMA. In the course of its judgment, the Court of Appeal rejected arguments advanced by the respondents to the effect that: (a) the FSA had to verify the information provided by the Commission and the Commission’s need for documents prior to taking action under the FSMA; (b) the FSA’s actions were at odds with the terms of the Memorandum and (c) it had to be established that production of the documents was ‘necessary or expedient’ in all the circumstances. It held that: there was nothing in the statute which required the FSA to second-guess a foreign regulator as to its own laws and procedures or as to the genuineness or validity of its request for assistance; the question of whether to provide the requested assistance was to be determined under the FSMA and not the Memorandum; and the test to be applied in respect of the production of documents was that contained in s. 171(2), namely whether the investigator reasonably considered production to be relevant to the purposes of the investigation; the test contained in s. 171(2) was a relatively low hurdle which had been cleared on the facts of the case. The Court of Appeal recognized that the FSA’s actions might engage the Article 8 right to privacy and, hence, considerations of proportionality came into play. However, it concluded that the actions taken by the FSA were proportionate in all the circumstances.

LABOUR PARTY IN THE DOG-HOUSE OVER AUTOMATED CALLS

Posted on | by Anya Proops KC

The Commissioner has this week issued an enforcement notice to the Labour Party in response to its act of making unsolicited automated marketing calls without consent to almost half a million people. The calls were made in June 2009 and were designed to encourage people to vote in the European elections. The ICO held that, notwithstanding their inherently political nature, the actions taken by the Labour Party amounted to unlawful ‘direct marketing’ for the purposes of the Privacy and Electronic Communications Regulations 2003. The enforcement notice requires the Labour Party to desist from making further automated calls without the recipients’ consent. Breach of the notice will amount to a criminal offence and could lead to prosecution. This is not the first time that a political party has received an enforcement notice in response to making automated calls. Similar notices have previously been served on the Conservatives, the Scottish National Party and the Liberal Democrats. See further the Commissioner’s press release on this issue.

EIR EXCEPTIONS – WHAT DOES IT ALL ADD UP TO?

Posted on | by Timothy Pitt-Payne KC

In Ofcom v Information Commissioner [2010] UKSC 3 the Supreme Court was asked to consider how public authorities should approach the exceptions to disclosure set out in the Environmental Information Regulations 2004 (EIR).  Most of these exceptions are subject to a public interest test.  The public interest in maintaining an exception has to be measured against the public interest in disclosure.  Unless the public interest in maintaining the exception outweighs the public interest in disclosure, the information must be disclosed.

But what happens if there are a number of exceptions in play?  Do you look at each exception in turn, assessing the public interest in maintaining that exception as against the public interest in disclosure?  Or do you aggregate all of the exceptions, assess the combined public interest in maintaining them, and measure that combined interest against the public interest in disclosure?

In the Ofcom litigation, the Court of Appeal had decided in favour of aggregation.  The Supreme Court was inclined (by a 3-2 majority) to uphold that decision.  But the Supreme Court also recognised that the answer was unclear, and depended on the construction of Directive 2003/4/EC.  So the Court has referred the issue to the European Court of Justice.

There is now a practical difficulty:  in cases where the aggregation point might make a difference to the outcome, what should the Tribunal do? Should it follow the Court of Appeal?  Should it wait for the ECJ?  Or should it reach its own view on how the legislation should be interpreted?  And Ofcom is an EIR case: what about aggregation under FOIA?

In practice nobody will want the outcome of their case to turn on a point that may not be resolved for some years.  It will be much more attractive for parties to argue that aggregation makes no difference to the outcome of their case.

 

THE PERSONAL IS POLITICAL – ACCESSING NICK GRIFFIN TRIAL RECORDS UNDER FOIA

Posted on | by Anya Proops KC

The Guardian reports today that the CPS has refused a request for disclosure of its records of the 1998 race-hate trial of Nick Griffin. In the year before he was elected leader of the BNP, Mr Griffin was given a suspended prison sentence after being convicted of an offence under the Public Order Act 1986. The prosecution case centred on a magazine edited by Mr Griffin in which he dismissed the Holocaust as a hoax. The Guardian’s article indicates that the paper requested disclosure of the CPS’s records of the trial in circumstances where no transcript had been made of the hearing. It would appear that the request was refused by the CPS under s. 40 FOIA (the personal data exemption) and, in particular, on the basis that a large proportion of the requested information was ‘sensitive personal data’ as it related to the commission of an offence and Mr Griffin’s political opinions (see section 2 of the Data Protection Act 1998). It would appear that the Guardian will now lodge a complaint with the Information Commissioner. For an example of how the Information Tribunal applied s. 40 FOIA to a request for disclosure of personal data about individuals who had been made subject to ASBOs see further Camden v IC EA/2007/21