MARKET REPORT: UK ONLINE MISHCON DE REYA
previous 12 to 18 months. In our experience of the "special measures" process, the GC expects divestment (of financial gain) arising out of the alleged "failings" of the licensee, but (by virtue of the short timetable) offers limited scope for representations. Te proposed amendments to the Policy indicate that divestment "may" be required, but in our view, divestment should never be a requirement of a process that does not provide adequate time for the allegations to be fully considered and responded to.
Moreover, given that the rationale for "special measures" is to encourage rapid operational change to achieve compliance, without recourse to a protracted review process, it is remarkable that the GC should also suggest that, even if the licensee implements the agreed action plan in full, this would not prevent them from reviewing the licence in any event (with the additional jeopardy and publicity that entails). If a licensee commits to make changes, under threat of a licence review, and implements those changes, they have a legitimate expectation that this will avoid a licence review, absent other issues.
Whilst we agree that positive regulatory outcomes may be achieved through a procedure that allows a willing licensee to avoid potentially protracted and costly enforcement proceedings by working with the GC to address issues/concerns identified during a compliance assessment, for the reasons outlined above, we find the proposals regarding "special measures" particularly troubling.
l Flexibility of approach - the GC also proposes
to amend the Policy to clarify that it may take a "flexible approach" to the review procedure, in particular to permit it to investigate further, and to issue further preliminary findings, after a licensee has made representations in response to a previous set of preliminary findings. We understand the issue the GC seeks to address, but the suggestion that its Policy should expressly contemplate it taking a "flexible" and therefore unpredictable, procedural approach is unsatisfactory.
l Regulatory settlement - the GC also proposes
to amend the Policy to state that it will not normally accept offers of regulatory settlement after the licensee has made representations in response to the GC's preliminary findings. Given that demonstrating insight into the "apparent failings" is a prerequisite of a regulatory settlement, the suggestion that a regulatory settlement would be unavailable after the point at which the licensee is first able to respond to the GC's preliminary findings seems to us unreasonable and procedurally flawed.
As readers will see, various aspects of the consultation give rise to real questions over procedural fairness. We will be publishing our response to the consultation on our Mishcon Accumulator blog at:
www.mishcon.com/accumulator. If you have any questions regarding this consultation, or any aspect of licensing, compliance or regulatory enforcement, please contact the authors.
P142 WIRE / PULSE / INSIGHT / REPORTS
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