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The ICC announces new arbitration rules to take effect on 1st January 2012. The International Chamber of Commerce announced in September the arrival of its new rules. The main changes appear to reflect developments in the 2006 amendments of the UNCITRAL Model Law in 2006 and the 2010 amendments to the UNCITRAL Rules in relation to emergency interim measures. This development can be seen as part of a new wave of arbitration reform with new statutes in France, Hong Kong and Scotland along with the amendments to the two main international rules.
The Upper Tribunal continued to narrow the distance between wholesale and retail compliance in Visser and Fagbulu. While creating fictitious deals was clearly market abuse, the striking feature of this case was the way in which the applicants were punished for not disclosing adverse information about the fund that they were managing to the wholesale investors involved. Principle 7 which only applies the requirement not to be "misleading" to wholesale situations was seen to have a broad application in this environment.
The application to the European Court to challenge the refusal to grant a hearing by the Financial Ombudsman Service was rejected summarily in the latest HM & E case. In a case where the only point of a hearing was a speculative allegation of no causation, a firm had no right to insist on a hearing under Article 6. This was a dreadful case to bring to the ECHR for the IFA sector because there was no he said/ she said allegation involved and so the court was almost bound to reject the application.
The Upper Tribunal in the Swift Trade case firmly backs the FSA's presumption of transparency about the publication of decision notices. The High Court in the S v. the FSA, granted an injunction on the basis that this presumption was arguably not a sufficient basis for publishing a decision notice that was not very polite about the applicants. However, it did so on condition that the applicants requested a confidentiality order from the Upper Tribunal. There, Sir Stephen Oliver QC declined to grant the application, effectively reversing the injunction decision.
Out and about: Adam Samuel spoke to the Jersey Compliance Officer's Association in September 2011 on financial promotions in Jersey: an English view. After a successful try-out earlier in the year, Adam Samuel now offers a financial promotions course covering law practice and regulation in the Channel Islands, the Isle of Man, Gibraltar along with the usual UK and EEA countries. Adam is running a two day workshop in October for Infoline on fact-finding and giving suitable financial advice. Favourite reasons given recently for not changing a promotion that might have been not compliant include: "we don't have enough pictures of ballerinas" and "if you say this is non-compliant, we'll have to take down the whole glass wall".
STORIES YOU MIGHT HAVE MISSED
The BBA's application for judicial review against both the FSA and FOS over PPI complaint handling ended ignominiously after the banks abandoned the idea of appealing the judgement of Mr Justice Ouseley. The Association made its decision on the penultimate day available to it to make its mind up. The decision itself reminded people that the Financial Services Authorities Principles are actually rules. They, therefore, apply unless something directly contradicting them exists elsewhere in the rulebook. Where the FSA rules has provisions in a particular area, one still has to apply the Principles on top of them unless there is a clear conflict between the two. "Don't worry; the specific rulebook does not require us to go that far" is not the correct answer to a compliance argument based on the principles such as "clear, fair and not misleading" and "treating customers fairly".
The FSA's enforcement of its complaint rules collapsed when banks openly defied the regulator by refusing to deal with justified PPI complaints in the light of their forthcoming judicial review application. The FSA appeared impotent in the face of a unilateral decision made by a number of banks to stop dealing with PPI complaints just because they had filed a judicial review application against the regulator and the Financial Ombudsman Service about the latter's handling of such cases and some largely anodyne guidance on firm complaint handling due to come into force in December 2010. A Dear Trade and Professional Bodies letter in January conceded wrongly that banks could put on hold cases that would be decided differently if the banks won their judicial review application.This continues a five year trend of FSA senior management appeasement of the industry on this subject and the abandonment by the regulator of its proposed past complaints review.
In AT&T Mobility LLC v. Concepcion, the US Supreme Court managed to produce its fourth consecutive incoherent decision on the Federal Arbitration Act. It decided that the Federal Arbitration Act's reference to "save upon such grounds as exist at law or in equity for the revocation of any contract" does not include the Californian defence to enforcement of a contract of unconscionability. The problem is that most of the cases in California do relate to arbitration clauses and that unconscionability also has to be judged in terms of its effects, not just the terms as they appear at the point of sale. The offensive clause barred any class actions which would have applied in litigation and arbitration alike although was probably aimed directly at arbitration in view of the barely still alive Bazzle case. Actually, unconscionability is the only ground for knocking out an unfair exception clause in a contract in California. So, this decision is just wrong.
