Legal development

FCA FSA Final Notice findings are inadmissible evidence in civil proceedings

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    FCA/FSA Final Notice findings are inadmissible evidence in civil proceedings. Deciding whether mis-selling has taken place is for the trial judge alone to determine.

    In AXA France IARD SA & Anor v Santander Cards UK Ltd & Anor [2022] EWHC 1776 (Comm), Sir Richard Field sitting as a deputy High Court judge was considering a claim by an AXA entity (A) concerning alleged PPI mis-selling by Santander Cards UK Ltd (S). S applied to strike out the references in A's Particulars of Claim to an enforcement Final Notice issued by the FSA in 2007 to S ("the Final Notice") which contained numerous findings of deficient sales practices by S in respect of the sale of PPI policies.  A pleaded their case of S's alleged mis-selling of PPI based on the Final notice including pleading the facts and matters relied upon in the Final Notice which agreed as between the FSA and S and A would rely upon the Final Notice and these agreed facts and matters in establishing their case that S mis-sold PPI policies.

    Field cited Hollington v Hewthorn [1943] 1 KB 587 and Christopher Clarke LJ's restatement of the rule in that case in Rogers v Hoyle [2014] EWCA Civ 257. Findings of fact made by another decision maker are not to be admitted in a subsequent trial because the decision at that trial is to be made by the judge appointed to hear it, and not another. The trial judge must decide the case for himself on the evidence that he receives, and in the light of the submissions on that evidence made to him. To admit evidence of the findings of fact of another person, however distinguished, and however thorough and competent his examination of the issues may have been, risks the decision being made, at least in part, on evidence other than that which the trial judge has heard and in reliance on the opinion of someone who is neither the relevant decision maker nor an expert in any relevant discipline, of which decision making is not one. The opinion of someone who is not the trial judge is, therefore, as a matter of law, irrelevant and not one to which he ought to have regard. In essence, the foundation of the rule must now be the preservation of the fairness of a trial in which the decision is entrusted to the trial judge alone. 

    Sir Richard Field concluded that the FSA's Final Notice did not constitute admissible expert evidence; it was decision maker's determination within the Hollington v Hewthorn rule. It therefore could not be adduced as evidence in support of A's pleaded causes of action against S founded on the alleged mis-selling of PPI policies. 

    This decision is an important reminder that parties to civil proceedings cannot pivot on FCA enforcement findings and have to prove their cases independently.

    Authors: Lynn Dunne, Partner and David Capps, Senior Consultant.

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