Financial services disputes expert Lisa Carty of Pinsent Masons said that the guidance “should strengthen the operation of the prohibition notice framework by providing greater transparency around decision-making while also highlighting the procedural safeguards available to individuals who are the subject of an investigation”.
The guidance (16 pages/312 KB) supplements the CBI’s existing Fitness and Probity investigations guidance and provides additional detail on how prohibition decisions will be made, including the factors that may be considered when determining the nature, scope and duration of the prohibition notice.
The guidance explains that decision-makers must have regard to the statutory objectives of the Fitness and Probity regime, apply principles of proportionality and consider a range of relevant circumstances – including the personal circumstances of the subject – when determining whether to impose a prohibition notice and, if so, the appropriate scope and duration of that prohibition.
Carty said: “The guidance provides firms and individuals with greater visibility regarding the factors that may influence prohibition decisions and promotes a more transparent and consistent decision-making process.”
Additionally, the guidance reinforces procedural safeguards for subjects of prohibition investigations. The update provides that a subject must be afforded a hearing before a prohibition decision is made and must be given access to relevant materials.
The supplementary guidance follows a recent High Court decision, Central Bank of Ireland v CD(184 pages/1.1 MB), in which the court refused to confirm a prohibition notice and found that the CBI’s process leading to its opinion was fundamentally flawed due to a “series of significant and serious errors”. The court identified serious breaches of natural and constitutional justice, including the failure to interview the respondent, the failure to interview witnesses identified by him, the application of an incorrect legal test by the investigator, and the absence of an oral hearing at either the investigation or decision-making stage.
Carty said: “Against the backdrop of the CD judgment, where the High Court was critical of aspects of the procedures followed, the CBI seeks to address any historic lack of fair procedures and seeks to ensure that affected individuals have a meaningful opportunity to engage with the process before a final decision is reached.”