Ford v The Financial Services Authority Johnson (Interested Party)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLady Justice Arden,Lord Justice Beatson
Judgment Date19 July 2013
Neutral Citation[2013] EWCA Civ 1521
Date19 July 2013
Docket NumberC5/2012/1651

[2013] EWCA Civ 1521




Royal Courts of Justice


London WC2A 2LL


Lady Justice Arden

Lord Justice Beatson



The Financial Services Authority


Interested Party

The Appellant appeared in person

Mr D Burgess (instructed by Financial Service Authority) appeared on behalf of the Respondent

The Interested Party appeared in person

Lady Justice Arden

This is a renewed application for permission to appeal against the order of Burnett J dated 12 June 2012. Permission was refused on paper by Mummery LJ. Today Mr Ford renews the application in person, and at the direction of the court the respondent filed a short position statement, for which the court is grateful. As it is an ongoing and longstanding matter, the court was grateful for that assistance. Mr Daniel Burgess has appeared for the Financial Services Authority today and we asked him for assistance on one point on which we required information and we are grateful for that. However, this we see as Mr Ford's opportunity to make his application for permission to appeal. There has been also present in court one of the interested parties, Mr Johnson, who has provided some assistance to Mr Ford but basically the submissions are those of Mr Ford, who has addressed us in person.


Mr Ford is a former Director and Chief Executive Officer of Key Data Investment Services Limited. He is also the majority shareholder of that company. Key Data was authorised by the Financial Services Authority to carry on investment business. In a nutshell, the Financial Services Authority started an investigation into it and also decided to make some investigation against Mr Ford as an individual. Key Data entered administration on 9 June 2009. Warning notices have been issued against Mr Ford and in those circumstances Mr Ford sought relief from the court to quash the warning notice that was extant and one protective warning notice and to restrain the Financial Services Authority from using the material.


He was successful before the judge in October 2011 in establishing that two emails on which the Financial Service Authority relied were the subject of legal professional privilege and should not have been used by the Financial Services Authority. So the judge stood the matter over so that he could decide on what steps should be taken to give effect to that ruling and to provide appropriate protection to Mr Ford from the use of that confidential and privileged material.


There was other confidential material consisting of communications between Grant Thornton Accountants and Mr Ford. That was previously in issue and there was a separate appellant's notice seeking permission to appeal in respect of privileged material. However, with the consent of Mr Ford, that appellant's notice was dismissed today. The principal matter argued on it, and indeed as I saw it the sole matter in the grounds of appeal, related to those communications with Grant Thornton. As a result of the decision of the Supreme Court in R (on the application of Prudential PLC) v Special Commissioner of Income Tax [2013] UKSC 1, it has been established by the Supreme Court that communications from an accountant could not be the subject of legal professional privilege.


So the position on this application is, in a nutshell, that Mr Ford advances three topics as constituting the areas in which he seeks relief on this appeal. First, he wants the warning notice to be quashed. Second, he wants the protective warning notice to be quashed. Third, he wants an order that the officials of the Financial Services Authority (now, of course, the Financial Conduct Authority) who had seen the legally professionally privileged material should be removed from this case. So those are the three areas of relief that he seeks and therefore he challenges those parts of the judge's judgment which are relevant to those matters. On this application we are not, of course, concerned with granting those orders but with determining whether or not there is real prospect of success in bringing a full appeal before this court. This is, as it were, an application whereby the court filters the appeal by applying that test.


It is clear that by successfully obtaining an order that two emails were the subject of legal professional privilege Mr Ford has established a violation of his rights under Article 8 of the European Convention on Human Rights. That is a right guaranteed by the Convention. It is what we call a limited right, namely it can be restricted in certain limited circumstances. Under the Human Rights Act 1998 the court has jurisdiction to give such remedies as it thinks fit to remedy the violation of a Convention right. So that is, as I see it, the jurisdiction which we must consider to be in issue.


In exercising the jurisdiction the court must, of course, act in a way which is just and which is proportionate having regard to all the circumstances but the jurisdiction is not penal, it is not given to the court to impose penalties on a person who has used legally professionally privileged material and, in essence, the court is invested with considerable discretion, a judicial discretion, as to what remedy to grant. But it leads on to this further point that what is just and appropriate involves an evaluation by the judge in the light of all the circumstances placed before him and on this appeal this court would not interfere unless it was satisfied that the judge was wrong. Thus to obtain an order granting permission to appeal, the applicant, Mr Ford, must satisfy the court that he has a real prospect of showing that the judge was wrong. I make those remarks by way of general introduction.


The judge gave a reserved judgment. In essence, he was satisfied that the legally professionally privileged material formed only a very modest part of the overall picture obtained by the FSA's investigation, that it was only a very small part of the detailed material on which the FSA relied in the warning notice and that it was peripheral. The judge distinguished an authority which is relied on in the grounds of appeal drafted by counsel and lodged in this matter, namely a decision of the House of Lords in a case called Berkeley v Secretary of State For The Environment and Others [2001] 2 AC 603. The judge distinguished that case. He held that he was dealing with a different sort of application altogether. Berkeley was a case where the Secretary of State had granted planning permission when he or she was required under European Union law first to have an environmental assessment. The House of Lords held that the judge had no option but to quash the planning permission. It was argued by counsel for Mr Ford before the judge that therefore the warning notice ought necessarily to be cancelled but the judge rejected that argument and held that the authority was distinguishable. He went on to hold at paragraph 20 that it was difficult to see that the warning notice would not have been issued even if the Financial Services Authority had not had the legally professionally privileged material. He held further at paragraph 21 that Mr Ford would be sufficiently protected if the warning notice was redacted ie all references to the privileged material were removed. He was assured that no member of the RDC, the Regulatory Decisions Committee, who had decided to issue the warning notice would have any further involvement in the process and accordingly it was not necessary to make an order in that regard. He made an order against the Financial Services Authority about retrieving material. That is not in issue today but extensive orders were made. At paragraph 21 the judge consider whether anyone who had read the warning notice or the supplementary investigation report into Mr Ford's activities should be taken off the case, that is anyone constituting an official of the Financial Services Authority. The judge took into account that the Financial Services Authority had acted on advice, a matter with which Mr Ford takes issue, and he concluded that the FSA had not acted arbitrarily. The judge concluded that the privileged material played only a small part in the warning notice and that in the circumstances it would be disproportionate to make an order that FSA officials should be taken off the case if they had previously seen the privileged material.


The judge then dealt with an application for disclosure and steps that the FSA should take to prevent further dissemination and use of the privileged material. I need not go into that because it is not in issue today. The judge made an...

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