Author: Russell J Kelsall

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Employment Tribunal decides adverse credibility findings by a judge are enough to justify dismissal of an employee subject to the FCA’s approved person regime

On 30 November 2018, the Employment Appeals Tribunal decided in Radia v Jefferies International Limited [2018] UKEAT 0123_18_3011 that a firm regulated by the UK Financial Conduct Authority (the FCA) was entitled to dismiss an equity research analyst for not being a “fit and proper person” under the FCA’s approved persons regime after an employment tribunal expressed the view the analyst lacked credibility as a witness.

The Employment Tribunal “made adverse findings about the Claimant’s credibility” and “found that the Claimant’s evidence was “not credible in many respects” and “on lots of occasions evasive” and that he had not told the truth or had misled the” Tribunal.  These findings were enough, the Employment Appeals Tribunal said, to justify the analyst’s dismissal (and it was not necessary to prove dishonesty).

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House of Commons publishes written responses to questions on mortgage regulation

On 1 April 2019, the House of Commons published answers to two written questions:

–           What discussions the Chancellor of the Exchequer has had with the Financial Conduct Authority on the development of the cost benefit analysis used to assess the potential impact of the its proposals in ‘Mortgage customers: proposed changes to responsible lending rules and guidance’ (CP19/14); and

–           What estimate (with reference to CP19/14) the Chancellor of the Exchequer has made of the number of mortgage customers currently unable to switch their mortgage product who will not be able to benefit from modified affordability assessment proposals.

The answer to the first question can be found by clicking here (including the relevant letters) and the answer to the second question can be found by clicking here (including relevant letters).

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Claims management companies become regulated by the Financial Conduct Authority

On 1 April 2019, the UK Financial Conduct Authority took over regulation of claims management companies (CMCs) in England, Wales and Scotland. CMCs had previously been registered by the Claims Management Regulator (a part of the Ministry of Justice). The FCA has issued a press release stating that more than 900 CMCs have registered for a temporary permission while they apply for authorisation from the FCA.

The FCA has also published a webpage on using CMCs.

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Information Commissioner’s Office fines Grove Pension Solutions Limited £40,000 for instigating the sending of almost two million spam direct marketing emails

On 26 March 2019, the Information Commissioner’s Office (the ICO) published a press release confirming it had fined Grove Pension Solutions Limited £40,000 for breaching the Privacy and Electronic Communications Regulations 2003 (PECR) by being responsible for almost two million spam direct marketing emails.

The ICO decided Grove Pensions Solutions Limited had instructed a marketing agent to use third party email providers to carry out hosted marketing campaigns that advertised the company’s services.

Grove Pensions Solutions Limited has sought advice from a data protection consultancy and legal advice on its planned activity. But the ICO decided Grove Pensions Solutions Limited received “misleading advice”. For more information, please see the Monetary Penalty Notice.

This penalty notice shows two things: (a) the ICO’s continued enforcement action for breaches of PECR and (b) the importance of good advice.

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FCA publishes proposed new rules to help ‘mortgage prisoners’ re-mortgage or move to another lender

On 26 March 2019, the UK Financial Conduct Authority published a consultation paper, CP 19/14, called ‘Mortgage customers: proposed changes to responsible lending rules and guidance’ (the CP).

The CP proposes to revise the creditworthiness and affordability rules for certain customers who want to switch products, or re-mortgage with another lender, where:

– they are up to date with their payments under an existing regulated mortgage contract (and have been for at least 12 months) but are unable to do so because they do not meet the FCA’s detailed rules (which were introduced in April 2014 following the Mortgage Market Review); and

– they don’t want to borrow more (excluding any product or arrangement fee for the transfer or re-mortgage).

The CP contains the FCA’s proposed changes to the Mortgages and Home Finance: Conduct of Business sourcebook to (amongst other things) (a) relax those rules in certain circumstances and (b) contact customers who may be eligible.

The consultation period ends on 26 June 2019.

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ECJ decides an employer offering a loan to an employee is a supplier for the purposes of the Unfair Contract Terms Directive

On 21 March 2019, the European Court of Justice gave its decision in Pouvin v Electricité de France (Case C 590/17) on whether a French electricity provider (EDF) was a supplier for the purposes of the Unfair Contract Terms Directive (93/13/EEC) (the UCTD).  EDF provided a loan to one of its employees and his spouse to buy a house.  The ECJ decided EDF was acting for purposes relating to its “trade, business or profession” and was therefore a supplier for the purposes of the UCTD.  

Because the employee was classed as a consumer, the French court must therefore consider if the terms of the loan are fair under France’s laws implementing the UCTD.  The broad interpretation of the definition of “supplier” helped achieve the UCTD’s objective of protecting the consumer (as a weaker party) and making sure there was balance in the relationship.