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Financial Service Tribunal does not conduct trials

Financial Services Tribunal does not conduct trials – tips on how to approach it

From a number of recent tribunal decisions, it seems that some intermediaries do not understand the purpose of the Financial Services Tribunal – in particular, that it functions as an appeal mechanism only. The tribunal made this point when it dismissed – as “bad in fact and in law” – the interlocutory applications by a debarred representative.

The representative applied for his debarment by Discovery Life to be reconsidered. He was debarred following a disciplinary hearing that led to his dismissal.

Some of the key take-aways from the tribunal’s decision are:

  • Applicants should not confuse procedural issues with substantive issues.
  • The tribunal does not look kindly on applicants trying to use the appeals process for discovery – what it called “fishing expeditions”.
  • It will reject applications for including documents that were not relevant to the original debarment proceedings and decision.

The applicant based his application for reconsideration on procedural and substantive unfairness.

Procedural grounds

He alleged the following three procedural irregularities:

  1. The chairman of the hearing had refused to allow him external legal representation.
  2. He had not been allowed to call four former clients as witnesses.

This second ground gave rise to his application to admit the affidavits of the four excluded witnesses and the right to call them in person to be cross-examined before the tribunal.

The tribunal said this application did not make sense. If his reconsideration application succeeded because it had been procedurally unfair to exclude the witnesses, then the evidence would be irrelevant for the purposes of the tribunal’s decision. If it failed, it would be because the evidence should have been excluded, and the evidence before the tribunal would likewise be irrelevant.

“Whether the evidence should have been allowed is thus a question for the tribunal when dealing with the main application, and it would be inappropriate to short-circuit the problem through a procedural application,” the tribunal said.

  1. He wanted documents related post-debarment occurrences – such as a letter to clients, CCMA proceedings, pension fund claims and civil litigation – to form part of the record.

The tribunal rejected this, saying: “Since these documents were not in existence at the time of the debarment, they cannot by any stretch of the imagination form part of the record of the debarment proceedings. The reconsideration application is concerned with the facts relating to the accusations and the proceedings dealing with them, and nothing else. These documents do not prove or disprove any relevant issue.”

Further evidence

The applicant also made an application for further evidence to be submitted. This included:

  • All the documents served before the Discovery Debarment Forum on 25 March 2021.
  • All the emails exchanged between the parties from 1 April 2019 to 31 March 2021.
  • All information and compliance records filed by the applicant with Discovery’s compliance department from 1 April 2019 to 31 March 2021.
  • All correspondence between Discovery and its insurance brokers and companies regarding any personal indemnity and crime and civil insurance claims contemplated and/or submitted by the respondent arising under the facts and circumstances regarding this dispute.
  • All the applicant’s HR and compliance performance reviews from 1 January 2016 to 31 March 2021.

The tribunal rejected this application, saying it was “a disguised application for discovery, also called a fishing expedition”.

“There is no evidence that any of these documents formed part of the disciplinary and debarment proceedings. And there is no evidence that they could prove or disprove the grounds for debarment.”

“The tribunal said it did not conduct trials and functions as an appeal mechanism. The matter that the decisionmaker considered must be reconsidered.”

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