Regulators' Hearings - Should they be in Private or Public?

When the Human Rights Act 1998 became part of UK law commentators sought to examine the way in which those articles of the European Convention on Human Rights incorporated into domestic law might make a difference to regulatory proceedings.

One point was that someone having his or her rights determined is, by virtue of Article 6 of the Convention, entitled to demand a public hearing subject only to certain limited exceptions. However, it is of course much more likely that a respondent to such proceedings would wish to have the proceedings dealt with in private, away from the glare of publicity. Can he or she insist upon a private hearing?

The Civil Procedure Rules (Part 39.2) contain a general rule that a court hearing is to be in public subject to a limited number of exceptions e.g. if publicity would defeat the object of the hearing, national security, the need to protect a child or a patient, or a private hearing is necessary in the interests of justice etc. Regulators, however, are not strictly bound by the CPR in their own hearings and can formulate their own rules.

In Eurolife Assurance Company v. Financial Services Authority, (decision published 26 July 2002) the Financial Services and Markets Tribunal ("the Tribunal") considered the circumstances under which it would hold a hearing under the Financial Services and Markets Act ("FSMA") in private. The Financial Services Authority ("FSA") issued a supervisory notice under s.53(4) of FSMA which, among other things, withdrew the authorisation of Eurolife to conduct new insurance business. Eurolife referred this decision to the Tribunal under s.55 of FSMA, and asked that the substantive hearing take place in private.

The Tribunal's powers

Under Rule 17 of the Financial Services and Markets Tribunal Rules 2001, the Tribunal may direct that a hearing, or part of a hearing, be held in private if it is satisfied that it is necessary, having regard to:

(i) the interests of morals, public order, national security or the protection of the private lives of the parties; or

(ii) any unfairness to the applicant or prejudice to the interests of consumers that might result from a hearing in public.

(i) and (ii) together were described by the Tribunal as the "unfairness or prejudice condition". The applicant need not prove that unfairness or prejudice would result on the balance of probabilities, but only that they might.

In addition, the Tribunal must be satisfied that a hearing in private would...