Decision Making in the Context of the Administrative Sanctions Procedure

Decision Making in the Context of the Administrative Sanctions Procedure A programme for Inquiry Members of the Financial Service Regulatory Authority 19 and 26 May, 2007 G Brian Hutchinson, BCL LLM DAL FCIArb BL Vice Dean, School of Law

Administrative and Constitutional Aspects • Reminder on Sources of Law…. • ….Public v. Private Law…. • ….Appeal v.s Review…. • Judicial Review of Administrative Action

Judicial Review of Administrative Action Reviewable decisions? “If Any body of persons having legal authority to determine questions affecting the rights of subjects, and having the duty to act judicially, act in excess of their legal authority they are subject to the controlling jurisdiction of the King’s Bench [High Court]…” R. v. Electricity Commissioners, Lord Atkin

Is the Inquiry Judicially Reviewable? Suggestion Inquiry is not a court but exercises judicial / quasi judicial function. Indicia of judicial function: • Lis inter partes (dispute between two parties). • Resolution lies with body obliged to determine dispute in accordance with law or principle rather than policy or discretion. • Resolution is final, subject to appeal, and capable of enforcement. Indicia of quasi-judicial function: • All the above but may include the exercise of a discretion.

Test for public element “Public Element Test” (Eogan v. UCD) Decision requiring resolution arising out of private contract not usually capable of review as a private law matter rather than public law matter in nature, unless: • Decision challenged is made pursuant to a statute.

Conclusion… Inquiry falls within ambit of: • Judicial function, • Quasi judicial function, and • Public element test. Power to issue binding and enforceable determinations can affect the interests and rights of the parties.

Thus… Inquiry must adhere to the principles and rules applicable to hearing, conducting and determining the rights of persons – the rules of fair procedures and natural and constitutional justice.

Fundamental Principles of Natural / Constitutional Justice Tribunal / Adjudicator’s functions, powers and obligations attract two fundamental principles essential to the proper legal functioning of the body. Non observance of principles can render determinations null and void through judicial review proceedings quashing the determination so made.

Principle 1 Bias (nemo iudex in causa sua principle): • Decision making body must be impartial. • Decision making body that lacks impartiality can be restrained from hearing matter or have decision quashed. • Bias must be objectionable.

Types of Bias • Bias can be manifest: • Personal grievance against a party. • Behaviour during proceedings displays a lack of fairness. • Bias can be subtle: • Has material interest in the proceedings. • Relationship or connection with a party to the proceedings.

Establishing Bias Establishing Bias: • Allegation or apprehension of bias insufficient. • Material or pecuniary interest association with proceedings may raise inference of bias. • Test is whether there is reasonable or real likelihood of bias.

Examples Examples of Objectionable Bias: • Material or Pecuniary Interest. • Avoided by member declining to sit / hear the proceedings. • Ill-will or malice. • May arise from hostile interaction between member and party to the proceedings.

Bias cont’d • Ties of relationship or acquaintance with a party to the proceedings: • Family, • Friend, • Association, • Legal representative (relative), • Witness.

Bias cont’d • Prejudging the proceedings: • Difficult to establish where a fair hearing is afforded the parties. • Could arise where Examination official sits on the Inquiry.

Bias cont’d 5. Conducting the hearing improperly: • Preventing the calling of witnesses. • Preventing presentation of case through numerous interruptions. • Favouring or appearing to favour one side over the other. • Inspecting or authorising the inspection of a premises or witness or evidence in the presence of one of the parties but not the other.

Bias cont’d • Practical matters to avoid: • Assistance given in preparing case. • Advice given in preparing case. • Overtly favouring one party in the course of the hearing. • Overtly prejudicing or disadvantaging one party in the course of the hearing.

Principle 2 Requirement of a fair hearing (audi alteram partem): • No person should be judged unheard. • Often referred to as the concept of “natural justice”. • Also referred to as “constitutional justice” and “fair procedures”. • Terms are used interchangeably.

Requirement of a fair hearing cont’d Purpose of hearing: • Enables decision maker to arrive at a correct and just result. • Enables the party to engage and participate in the proceedings. • Enables the party to appreciate the decision of the decision maker having participated in the proceedings.

Requirement of a fair hearing cont’d Factors affecting the need for a fair hearing: • Varies according to the nature of the issue at dispute, allegations of wrongdoing and sanctions. • Courts lean towards their own practices and procedures. • Nature of the body making the decision can affect the criteria needed for a fair hearing. • Previous conduct of the decision maker might lead to legitimate expectation of consultation and engaging in the decision making process. • Party may not be entitled to a hearing where there is a failure to satisfy some preliminary or procedural requirement.

Requirement of a fair hearing cont’d Pre hearing requirements to comply with a fair hearing: • Prior Notice A party affected by the decision making process must be given notice of the hearing. The notice must be adequate to enable proper preparation for the hearing. May impact on a request for granting an adjournment.

Requirement of a fair hearing cont’d • Denial of a hearing: Preventing a party attending the hearing is a prima facie breach of the constitutional right to a fair hearing and renders the decision made by the decision maker subject to judicial review and being quashed by an order of certiorari..

Requirement of a fair hearing cont’d Elements of a fair hearing: 1. Hearing must be conducted in a fair manner. • Proper and uninhibited scope to present their case. • Equal treatment to both parties. • Giving no unfair advantage to one side unless one party is not represented. • Avoid excessive intervention and interruption by decision maker.

Requirement of a fair hearing cont’d • Attendance of witnesses: • Party must be allowed give evidence in support of their case and must also be allowed have witnesses attend and give material evidence of that party’s behalf.

Requirement of a fair hearing cont’d 3. Examination of witnesses: Essential element to a fair hearing. • Each party has the right to question the evidence given by the other party. • Each party has the right to question the evidence given by a witness called to support that party’s case.

Requirement of a fair hearing cont’d • Legal representation: • No obligation to provide legal representation. • Cannot prevent a party presenting their case through a legal representative or other person. • Where decision making process expressly provides for legal representation such will be strictly enforced.

Jurisdiction and Acting Lawfully Inquiry established by Statute. Statute gives legal status to Inquiry. Inquiry’s lawful authority to act is governed by the statute creating it. Tribunal operates lawfully by complying with the provisions of the Act. Statute confers “jurisdiction” upon Inquiry to determine whether contravention has occurred Inquiry can ONLY determine disputes in accordance with the provisions of the Statute.

Jurisdiction and Acting Lawfully cont’d If Tribunal has no jurisdiction, it cannot act or if it does so act, acts without lawful authority (acting without jurisdiction). If Tribunal acts in excess of jurisdiction, the decision or action is invalid (acting in excess of jurisdiction). Want of jurisdiction in either scenario results in unlawful authority rendering any decision or action invalid.

Jurisdiction and Acting Lawfully cont’d Acting without or in excess of jurisdiction: Improperly constituted Inquiry

Jurisdiction and Acting Lawfully cont’d Non compliance with rules for commencing inquiry: Both a breach of natural / constitutional justice and jurisdictional error invalidating the Inquiry’s jurisdiction. • Failure to include correct information in the notice

Jurisdiction and Acting Lawfully cont’d Non compliance with jurisdictional limits: • Sanctions • Sanctions where criminal offences involved

Jurisdiction and Acting Lawfully cont’d Failing to hold hearing in public? Delicate! If Service Provider demands it – factors to consider.

Jurisdiction and Acting Lawfully cont’d Infringes natural or constitutional justice principles: • Bias. • Material or Pecuniary Interest. • Ill-will or malice. • Ties of relationship or acquaintance with a party to the proceedings. • Prejudging the proceedings. • Conducting the hearing improperly.

Jurisdiction and Acting Lawfully cont’d • Requirement of a fair hearing: • Prior Notice. • Denial of a hearing. • Hearing must be conducted in a fair manner. • Attendance of witnesses. • Examination of witnesses. • Legal representation.

Jurisdiction and Acting Lawfully cont’d Errors of law: • Interpretation or construction of statute. • Error in determination of a legal issue. • Consideration of irrelevant material or disregarding relevant material. • Rigid adherence to policy where a discretion exists but is never exercised as a matter of policy. • Error in admission or exclusion of evidence.

Decision Making in the Context of the Administrative Sanctions Procedure