Dray Simpson v Cantor Fitzgerald Europe
| Jurisdiction | England & Wales |
| Judge | Lord Justice Henderson,Lady Justice Rose,Lord Justice Bean |
| Judgment Date | 27 November 2020 |
| Neutral Citation | [2020] EWCA Civ 1601 |
| Date | 27 November 2020 |
| Docket Number | Case No: A2/2019/1639/EATRF |
| Court | Court of Appeal (Civil Division) |
[2020] EWCA Civ 1601
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE CHOUDHURY, PRESIDENT
UKEAT/0016/18/DA
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Bean
Lord Justice Henderson
and
Lady Justice Rose
Case No: A2/2019/1639/EATRF
David Reade QC (instructed by Clintons) for the Appellant
Alice Mayhew (instructed by Cantor Fitzgerald Europe Legal Department) for the Respondent
Hearing date: 05 November 2020
Approved Judgment
This is an appeal by Mr Dray Simpson against the decision of the Employment Appeal Tribunal (“EAT”) dismissing his appeal against the decision of the Employment Tribunal (“ET”) to dismiss his claim against Cantor Fitzgerald Europe.
The appeal focuses on the whistleblowing provisions of Part IVA of the Employment Rights Act 1996 (“the 1996 Act”). The Appellant challenges the judgment of the ET before this court in almost identical terms as before the EAT.
Factual and procedural background
The Appellant worked for the Respondent, a UK-based investment bank, from 23 February 2015 to 31 December 2015. His job title was Managing Director on the Emerging Markets Desk. The Respondent had recently established this desk when the Appellant was taken on. The Respondent had struggled to fill the desk but the Appellant's experience, which included years spent working in Ukraine, made him a suitable choice. The Appellant worked on the desk as a salesman alongside traders and other salespeople.
The Appellant first worked for a probationary period of six months from 23 February to 21 August 2015. The Respondent confirmed the Appellant's employment after this period. However, on 16 November 2015 the Appellant was suspended and on 1 December 2015 he was dismissed, spending the time until the expiry of his notice on 31 December 2015 on garden leave.
By a claim form filed on 6 April 2016 the Appellant made public interest disclosure claims under s 47B (detriment) and s 103A (unfair dismissal) of the 1996 Act and a contractual claim for unlawful deductions from pay. The claims were heard at the East London Hearing Centre over 7 sitting days in April 2017 by a three-member ET chaired by Employment Judge Prichard. A decision dismissing all the claims was promulgated on 17 July 2017. The Appellant filed a notice of appeal against the ET judgment on 12 January 2018. The EAT (Choudhury P) heard the appeal on 7 February 2019 and handed down judgment dismissing the appeal on 21 June 2019. I granted permission to appeal to this court on 15 November 2019. The appeal was due to be heard in May 2020 but was postponed because of the pandemic.
Decision appealed
In his particulars of claim, the Appellant alleged that he made four protected disclosures which were the reason or principal reason for his dismissal. Each of these alleged disclosures covered several different events that took place over a period of months, and the issues arising in each cross over a good deal. None consists of a communication of information on a single occasion that might ordinarily be considered a disclosure. However, they can be summarised as follows:
i) Protected Disclosure 1 covered the Appellant's concerns that a colleague, Steven Gooden, was acting in breach of FCA regulations by working with clients while still awaiting FCA approval.
ii) Protected Disclosure 2 covered the Appellant's concerns that traders were providing misleading information to clients.
iii) Protected Disclosure 3 (also called Protected Disclosure 2 in the particulars of claim) covered the Appellant's concerns that traders were engaging in an illegal practice known as front-running.
iv) Protected Disclosure 4 (called Protected Disclosure 3 in the particulars of claim) covered the Appellant's concerns that traders were circumventing the processes for performing customer due diligence before making a trade.
Taken together, the protected disclosures alleged by the Appellant formed a narrative of misconduct of various sorts constantly taking place around the Appellant while he raised concerns with his colleagues, who rebuffed him.
A list of issues before the ET asked them to make findings about protected disclosures under no fewer than 92 subparagraphs, but there is a good deal of repetition under the various headings. In their judgment, the ET adopted Ms Mayhew's distillation of the Appellant's case into 37 separate alleged disclosures. Each of these constituted a single communication made on a specific date.
The ET found that none of these communications was a protected disclosure, and that to say that the principal reason for the Appellant's dismissal was that he had made protected disclosures would be “utterly fanciful”. It found that the Appellant's “distrustful and obstructive” behaviour had made it “utterly impossible for the team to work with him, and that his distrust of the other traders is what he “was ultimately dismissed for”. His claim for unlawful deductions from pay, which was not pursued on appeal, was also dismissed.
Front running
Evidence was given about a practice known as “front running”. It was described in the ET's judgment as follows:-
“19 Explained simply, a client places an order for $20m of a certain bond and the trader holds back that order and buys $2m of the same bond then puts the client's order through. The price will go up because that is what a large order of a certain instrument will do to the price of a bond. The trader has bought a smaller amount in the bank's own right. The private knowledge that a larger amount is soon to be acquired makes this analogous to insider dealing. The illustration just given is the simplest paradigm case. There are more subtle variants. The practice is illegal both in the US and the UK, under the respective Securities and Exchange Commission (SEC), and Financial Conduct Authority (FCA) regulatory codes.
20 In Cantor Fitzgerald's market conduct policy the practice of front running comes under the rubric heading of “Insider dealing” phrased:
“The front running of orders i.e. where a broker executes orders for one customer with the benefit of advanced knowledge based on pending orders from other clients or proprietary trading within advanced knowledge of client orders thereby benefit from the impact of those other orders.”
21 Other provisions we were referred to which arise during the narrative of this case were as follows:
“Incorrectly advertised volumes could create false or misleading impressions as to the supply/demand of stock traded by a firm. Such false or misleading impressions could in turn encourage market participants to trade the stock through the firm. For example where a market participant sees that a firm has traded a large volume in a given stock which results in a significant market share they may infer that the firm is the most competitive entity for them to route future trades in that stock.”
The concept of misleading behaviour or distortion is explained (at length) as follows:
“This is behaviour which gives or is likely to give a regular market user a false or misleading impression in relation to the supply of, demand for, or price, or value of an investment, or would or would be likely to be regarded by a regular user of the market to mislead or distort the market in any way and is likely to be regarded by a regular user of the market as a failure on the part of the person concerned to observe the standard or behaviour reasonably be expected of a person in his position in relation to the market.”
22 Another important and relevant aspect is the suspicion provisions as follows:
“Upon suspicion that any party has committed or attempted to commit this offence the employee must follow the suspicious activities and incidents procedures which can be found on the intranet. Reports of suspicious activities and incidents including manipulating transactions are highly confidential. Employees must not make any unauthorised disclosures of such reports. Doing so may tip off a suspect and compromise an official investigation which is a potential criminal offence.””
The ET continued:-
“31 A theme which has emerged from the narrative was the claimant's tendency to raise the spectre of large scale fraud investigations/criminal trials, and to send links by email to his colleagues Thomas Blondin and Steve Gooden. Early examples were 13 May 2015 a Bloomberg article about the Jesse Litvak fraud trial headed “White lies and guilty pleas”.
32 Another email on 12 June the subject heading: “Wow criminal trial this year or next I think”. This attached the judgment of Eder J in the UK Commercial Court on a $175m fraud where the lead claimant was Otkritie International Investment Management Ltd against many Russian defendants. His Lordship stated:
“Anyone sitting in court listening to the evidence and the parties' respective submissions might have been forgiven for supposing that they were in the Old Bailey rather than in the Commercial Court in the Rolls Building.”
33 Much of the claimant's oral evidence strayed to wider corruption in the financial sector including mention of the LIBOR affair (in which, as a matter of fact, Cantor Fitzgerald was never involved in any way).”
The tribunal's judgment did not contain a separate section summarising the relevant law: this omission is a topic to which I shall return later.
Protected disclosures as described by the ET
A substantial part of the decision of the ET is taken up with a narrative of each of the 37 alleged protected disclosures by the Claimant. (Quite rightly, in view of the terms of Rule 62(4) of the Employment Tribunal Rules of Procedure 2013 (“the ET Rules”), the more important ones are treated in greater detail than the less important ones.) I will quote only a...
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