FSA wins costs after firm 'refused to co-operate'

Monday 20th February 2012

The FSA has been awarded costs after proceedings by an accountancy firm, which had refused to co-operate over a supervisory visit, were judged ‘unreasonable’.

The Upper Tribunal (Tax and Chancery Chamber) awarded the costs after the FSA successfully defended its decision to cancel the permission of James Perman & Company (JPC), a Scottish accountancy firm.
 
The FSA decided to cancel the permission granted to JPC, an authorised professional firm, in June 2010 after the firm repeatedly refused to comply with the FSA’s request to conduct a supervisory visit at the firm’s offices.
 
However, JPC referred the FSA’s decision to the Upper Tribunal in July 2010, but the Upper Tribunal dismissed the reference in August 2011.

It then directed the FSA to cancel JPC’s permission because the firm had failed to cooperate with the FSA. The FSA did this in September 2011.

The FSA then applied to the Upper Tribunal to recover its costs, arguing that JPC had acted unreasonably in pursuing the tribunal proceedings after the FSA had offered a reasonable settlement to the firm in November 2010.

The Upper Tribunal agreed that JPC acted unreasonably, given the fair terms of the FSA’s offer. The FSA’s costs were £8,665.

The FSA only very rarely makes an application for costs against firms which make an unsuccessful reference to the Upper Tribunal, but said it will consider doing so if it feels a firm acted reasonably in triggering tribunal proceedings, in order to encourage proper use of the tribunal process to challenge the FSA’s decisions.

Will Amos, head of retail enforcement at the FSA, said: “This decision emphasises the importance of ensuring that the Upper Tribunal process and the resources of the FSA are not used unnecessarily.

“We believed that JPC had acted unreasonably in refusing the FSA’s settlement and choosing to make a referral to the tribunal. By making the costs order against Mr Perman, the Upper Tribunal has endorsed the FSA’s message that our resources and the tribunal process must not be misused.”