BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!
 |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] | |
European Court of Human Rights |
||
|
You are here: BAILII >> Databases >> European Court of Human Rights >> X v United Kingdom - 28530/95 [1998] ECHR 117 (19 January 1998) URL: http://www.bailii.org/eu/cases/ECHR/1998/117.html Cite as: [1998] ECHR 117, 25 EHRR CD88, (1998) 25 EHRR CD88 |
||
[New search] [Contents list] [Help]
AS TO THE ADMISSIBILITY OF
Application No. 28530/95
by X.
against the United Kingdom
The European Commission of Human Rights sitting in private on
19 January 1998, the following members being present:
Mr J.-C. GEUS, Acting President
MM E. BUSUTTIL
J.-C. SOYER
H. DANELIUS
F. MARTINEZ
C.L. ROZAKIS
Mrs J. LIDDY
MM B. MARXER
I. CABRAL BARRETO
B. CONFORTI
N. BRATZA
D. SVÁBY
C. BÎRSAN
K. HERNDL
E. BIELIUNAS
E.A. ALKEMA
M. VILA AMIGÓ
Mrs M. HION
MM R. NICOLINI
A. ARABADJIEV
Mr M. de SALVIA, Secretary to the Commission
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 16 May 1995 by X.
against the United Kingdom and registered on 13 September 1995 under
file No. 28530/95;
Having regard to:
- the reports provided for in Rule 47 of the Rules of Procedure of
the Commission;
- the observations submitted by the respondent Government on
30 January 1997 and the observations in reply submitted by the
applicant on 29 April 1997;
- the parties' oral submissions at the hearing on 19 January 1998;
Having deliberated;
Decides as follows:
THE FACTS
The applicant is a United Kingdom citizen born in 1944. He lives
in Edinburgh and is represented before the Commission by
Mr H.R. Donald, solicitor, of Messrs Shepherd & Wedderburn, Edinburgh.
The facts of the application may be summarised as follows.
The particular circumstances of the case
The applicant was formerly the managing director of an insurance
company, regulated by the Insurance Companies Act 1982. This insurance
company ("the former company") was sold in October 1993 by the
shareholder and the applicant left the company. He was subsequently
offered a position as chief executive of a different insurance company
("the company"), also regulated by the Insurance Companies Act 1982.
On 14 February 1994 the Secretary of State for Trade and Industry ("the
Secretary of State") served on the applicant a preliminary notice under
Section 60(3) of the Insurance Companies Act 1982 ("the 1982 Act").
It stated that the Secretary of State was considering the service of
a notice of objection, on the ground that the applicant was not a fit
and proper person to be a chief executive of the company.
In a covering letter the applicant was informed that the main
reason for the service of the notice was:
"that it appears to the Secretary of State that, in your capacity
as the managing director of [the former company], you pursued a
policy of developing sales in a manner which was detrimental to
the prudential interest of that company, and failed to alert the
Department promptly to its deteriorating financial position. In
particular it appears that
(a) you ignored and overruled the advice of [the former
company's] compliance department in the recruitment of
company representatives;
(b) you overruled actuarial advice in the matter of
underwriting procedures, placing [the former company] at
risk;
(c) you brought pressure to bear to stop the appointed actuary
from alerting the Department to the deteriorating financial
situation in [the former company]."
The applicant was invited to make any written or oral
representations he wished, and on 7 March 1994 he submitted, via his
solicitors, a 14 page paper in which he set out the history of his
involvement with the former company, and his plans and development
there. At pages 12 to 14 of the paper the applicant gave his comments
on the letter of 14 February from the Department of Trade and Industry
("the DTI") . As to point (a), the applicant explained that sales
directors had been involved in recruiting because no-one else at the
company had appropriate recruiting experience. He also referred to a
survey which the company's compliance department had prepared as to
recruitees' competence, and a further investigation by Lautro (the Life
Assurance and Unit Trust Regulatory Organisation) into staff.
As to point (b), the applicant based his comments on three
headings, which had been given to him by the DTI. As to the second
heading, that the applicant had waived personal medical attendance for
some 20 people, the applicant stated "At no time did I waive any PMAs
and am confused as to what this particular comment is about". In
connection with the third heading, that the applicant had overruled the
underwriting in the specific case of a large life policy for
£1 million, the applicant accepted that he had tried to speed up the
process, but stated that at no time did he give instructions to accept
the case without all necessary procedures being adopted.
As to the final point in the DTI's letter of 14 February,
point (c), the applicant agreed that he had suggested that the
appointed actuary should await the outcome of certain internal
deliberations between the shareholder and board before contacting the
DTI on an earlier valuation of the company. He justified this approach
by reference to the standing of the shareholder.
On 15 March 1994, a hearing was held in London before four civil
servants. Three were from the DTI and one was from the Government's
Actuary's Department. The applicant attended with his representative.
In the course of the hearing on 15 March 1994 the applicant read
out a prepared statement and answered questions from the civil
servants. The hearing took the form of an informal questioning of the
applicant by the civil servants, with no evidence being called by
either party. The questions dealt with, inter alia, procedures for
ensuring compliance with the relevant regulations, and the role of the
"Compliance Department", the policy pursued by the applicant in
recruiting new staff and the relationship between sales staff and
compliance staff. Questions also went to the priorities set by the
applicant in building up the business, and a dispute with the parent
company. It became apparent in the course of the discussion that the
applicant and the appointed actuary in the former company did not
always agree over work and that it was the appointed actuary who had
contacted the Secretary of State to raise objections to the applicant's
appointment as chief executive of the company.
In reply to a comment by the applicant's representative that the
applicant was not aware of the particular allegation, the official
charing the meeting immediately replied that the information had come
from the appointed actuary. Further discussion turned on the
applicant's relationship with the underwriting department, and the
specific contract for an alleged £1 million was referred to. The
applicant accepted that he had given instructions to speed up the
financial underwriting concerning this case, but denied that he had
suggested that the proper checks and medical reports could be dispensed
with. He stated that the amount eventually paid out was considerably
less than £1 million.
Another area of discussion concerned the relationship between the
applicant and the appointed actuary, who was responsible for compliance
with regulations, and was under a duty, in certain circumstances, to
liaise with the DTI. The applicant agreed that, when the actuary had
proposed that the DTI should be informed of the deteriorating financial
position of the former company, he had told the actuary to consider
where his loyalties lay. Further discussion turned on the position
when the DTI was eventually informed of the problems in the company,
and why the applicant had not approached the DTI at an earlier stage.
After a short break there was a discussion about the applicant's
perceived role as chief executive at the company.
The transcript of the hearing runs to 46 pages.
On 31 March 1994 the Secretary of State issued a formal notice
of objection under Section 60(1) of the 1982 Act. In a letter the
applicant was informed that the Secretary of State had taken into
account his written and oral representations, and also accepted that
the applicant did not wilfully intend the former company to break any
regulatory rules, and that the applicant did not give any direct
instructions that underwriting procedures should be waived. The letter
continued:
"However the Secretary of State has had regard to your previous
experience (which was almost entirely in sales and marketing) and
to your performance as chief executive of [the former company],
in particular the attitude you took towards concerns raised by
the Compliance Department and the appointed actuary, and the
pressure you exerted on the underwriting department. Taking all
these facts into account, the Secretary of State believes that
your appointment as chief executive of [the company] would
encourage a corporate climate in which sales would be pursued
without sufficient regard being paid to compliance and prudential
considerations."
There is no statutory appeal against the issuing of a notice of
objection. The applicant therefore applied for judicial review of the
Secretary of State's decision complaining principally that the notice
of objection was irregular, unfair and contrary to the principles of
natural justice. The case came before Lord Osborne in the Outer House
of the Court of Session and the hearing was completed on
28 October 1994.
Lord Osborne issued a judgment of the Outer House of the Court
of Session on 27 January 1995. Lord Osborne rehearsed the background
and the facts, and summarised the arguments by the parties. He
continued:
"a prominent part of the [applicant's] case was the contention
that the [Secretary of State's] conduct of the proceedings under
Section 60 of the Act of 1982 was, in all the circumstances,
unfair. The background to that contention was unanimity between
the parties on the point that, in operating the procedures set
out in Section 60, the [Secretary of State] had a duty to act
fairly."
The applicant's complained in particular that precise allegations
were never put to him and that he was merely faced with broad imprecise
charges.
Lord Osborne considered the effect of Section 60 (4) of the 1982
Act which states:
"The Secretary of State shall not be obliged to disclose to the
company or to the person proposed to be appointed any particulars
of the ground on which he is considering the service on the
company of a notice of objection."
Lord Osborne referred to Parliamentary papers, as was permitted
under domestic law, in order to seek assistance as to the intention
behind the 1982 Act and Section 60 (4) in particular. He referred to
the speech of the Earl of Limerick, a minister who was in practical
terms a promoter of the Bill which became the 1982 Act, and who had
commented as follows during the Parliamentary debate:
"'But the really difficult case is where the man's previous
activities have left such doubts as to either his competence or
his honesty as would lead any prospective employer to eliminate
him from his shortlist of candidates but which would be extremely
difficult to substantiate to the satisfaction of any judicial
tribunal. Moreover, such information may reach us from sources
well placed to judge and to advise, but which are willing to
assist us in this way only on the assurance that the source will
not be revealed. Often the nature of the information is such
that its disclosure would almost certainly permit identification
of the source and the consequence would be the loss of that
assistance in the future'".
Having referred to this material Lord Osborne went on in his
judgment to state:
"Consideration of this material confirms me strongly in the view
which, prior to its consideration, I had tentatively adopted that
the word 'particulars' in Section 60(4) was intended to cover any
material of any kind whatsoever placed before the Minister
relevant to the ground mentioned above, including evidence of
primary fact. Thus, the conclusion which I reach on the
interpretation of Section 60(4) is that the contention of the
[Secretary of State] in this regard is correct. The Minister is
under no obligation therefore to disclose any detailed
information relating to the ground on which he is considering the
service of a notice of objection.
In my opinion, however, it does not follow from the adoption of
that view that, in a case such as the present, a Minister would,
in all circumstances, be entitled to refrain from disclosing to
a person who is the subject of inquiry anything at all relating
to the information placed before him. It may well be that, to
revert to the words of Lord Mustill, 'fairness will very often
require that he is informed of the gist of the case which he has
to answer'. It appears to me that there may be cases in which
this can be done without the disclosure of the source of the
information concerned.
Alternatively, it may be that the disclosure of the source of the
information concerned in a particular case would not prejudice
the availability of information to the Minister in future. With
my conclusion as to the proper interpretation of Section 60(4)
and all of this in mind, I now turn to consider what was done in
this particular case by way of disclosure.
Having considered the terms of the letter of 14 February 1994 and
those passages in the transcript of the oral representations, in
which those acting for the respondent supplemented the material
in that letter, it appears to me that, in this case, there was,
prima facie, an extensive disclosure of the gist of the case
which the petitioner had to answer. Indeed, that disclosure went
so far as to indicate to the petitioner the source of the
information which had come into the possession of the respondent,
namely [the appointed actuary], although the precise terms of the
information supplied by him may not themselves have been
disclosed.
At various stages of the petitioner's submissions, it was said
that detail of this or that matter had not been disclosed. It
appears to me that whether that amounts to a criticism of the
fairness of the respondent's handling of the matter or not must
depend on, among other things, whether the respondent was in fact
in a position to disclose more detail than he did. As regards
that, as was pointed out for the respondent, the Court has no
means of reaching a conclusion. Since I am not in the position
of knowing precisely what information was laid before the
respondent regarding the matters concerned, I consider that I am
unable to say that the respondent acted in a manner which was
unfair as regards the extent of the disclosure which he made.
If it had been the case that, in his explanation of his decision
to serve a notice of objection, the respondent had relied on
material which had not, at least in outline, been put to the
petitioner for his response, then the position would, in my
opinion, have been quite different. However, looking at the
respondent's letter of 31 March 1994 and comparing it with the
letter of 14 February 1994 and the transcript of the proceedings
at the hearing of the oral representations, it appears to me that
no material was relied upon by the respondent in his decision
which had not be canvassed in one way or another with the
petitioner.
In all of these circumstances, in my judgment, the broadly based
attack on the handling by the respondent of the matter as regards
disclosure must fail. ...
I pass now to consider those arguments of the petitioner which
were based upon the fact that, without express notice having been
given in the letter of 14 February 1994, at the hearing of oral
representations, the petitioner was questioned at some length as
to how he perceived his role at [the company]. It has to be
recognised at the outset that there is no specific warning in the
letter of 14 February 1994 that it was intended by the respondent
to explore that particular matter. Equally however it has to be
recognised, in my opinion, that it is made clear in that letter
that the nature of the whole inquiry which the respondent was
undertaking was with a view to reaching a conclusion on the
question of whether or not the petitioner was a fit and proper
person to be the chief executive of that company. That being the
nature of the investigation being conducted, in my opinion, it
should have been obvious to the petitioner that the respondent
would have wished to satisfy himself, so far as possible, as to
exactly what was the nature of the office to which the petitioner
aspired to be appointed. Thus, in my opinion, it should have
come as no surprise to the petitioner that he was asked questions
relating to that matter.
... In the whole circumstances and for the foregoing reasons, I
have reached the conclusion that the petitioner is not entitled
to the remedies which he seeks. ..."
Accordingly the applicant failed to overrule the notice of
objection by means of judicial review.
The applicant initially appealed against the decision of Lord
Osborne, but withdrew his appeal after receiving legal advice that he
was unlikely to be successful. Counsel's advice was based largely on
the consideration that, given the wording of Section 60 (4) of the 1982
Act and Lord Osborne's interpretation of it, it was not possible to
construe the provision in a way which would permit further disclosure.
The Inner House of the Court of Session formally dismissed the
applicant's appeal from Lord Osborne's decision on 14 July 1995.
The relevant domestic law
Section 60 of the Insurance Companies Act 1982
"(1) No insurance company ... shall appoint a person as ... chief
executive of the company unless-
(a) the company has served on the Secretary of State a written
notice stating that it proposes to appoint that person to
that position ...; and
(b) either the Secretary of State has, before the expiration of
the period of three months beginning with the date of
service of that notice, notified the company in writing
that there is no objection to that person being appointed
to that position or that period has elapsed without the
Secretary of State having served on the company a written
notice of objection.
...
(3) The Secretary of State may serve a notice of objection under
subsection (1) above on the ground that it appears to him that the
person proposed to be appointed is not a fit and proper person to be
appointed to the position in question, but before serving such a notice
the Secretary of State shall serve on the company and on that person
a preliminary written notice stating-
(a) that the Secretary of State is considering the service on
the company of a notice of objection on that ground; and
(b) that the company and that person may, within the period of
one month from the date of service of the preliminary
notice, make written representations to the Secretary of
State and, if the company or that person so requests, oral
representations to an officer of the Department of Trade
appointed for the purpose by the Secretary of State.
(4) The Secretary of State shall not be obliged to disclose to the
company or to the person proposed to be appointed any particulars
of the ground on which he is considering the service on the
company of a notice of objection.
(5) Where representations are made in accordance with this Section
the Secretary of State shall take them into consideration before
serving the notice of objection."
COMPLAINTS
The applicant alleges a violation of Article 6 of the Convention.
He claims that the finding by the Secretary of State that he was not
a "fit and proper person" effectively determined his civil right to
take up his position with the company, and that he should therefore
have been entitled to a fair hearing in that determination.
The applicant considers that the proceedings before the four
civil servants were neither judicial nor fair, and that the scope of
review of the Secretary of State's decision by the Court of Session was
insufficient to comply with the requirements of Article 6.
With specific reference to the case of Bryan v. the United
Kingdom (Eur. Court HR, judgment of 22 November 1995, Series A no. 335-
A) the applicant points out, inter alia:
- that the civil servants who heard him did not give full
disclosure of the allegations against him;
- that they were not an "independent tribunal";
- that the Court of Session was precluded from considering the
fairness of the notice given to him of the allegations against
him because of Section 60 (4) of the 1982 Act;
- that the Secretary of State's decision (the letter of
31 May 1994) was not carefully reasoned, unlike the Inspector's
decision in the Bryan case;
- that it was not even clear in the present case what were the
findings of fact of the DTI officials or the Secretary of State;
- that the provisions of Section 60 of the 1982 Act contrast
starkly with the Company Directors Disqualification Act 1986, by
which the Secretary of State may make an application to a court
for disqualification: in such a case the Secretary of State has
to set out the conduct which made the person unfit to be a
director, and that statement is subjected to proper judicial
control.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 16 May 1995 and registered on
13 September 1995.
On 16 October 1996 the Commission (First Chamber) decided to
communicate the application to the respondent Government.
The Government's written observations were submitted on
30 January 1997, after an extension of the time-limit fixed for that
purpose. The applicant replied on 29 April 1997, also after an
extension of the time-limit.
On 23 October 1997 the Commission (First Chamber) decided to
refer the case to the Plenary Commission.
On 27 October 1997 the Commission decided to hold a hearing on
the admissibility and merits of the application. The hearing was held
on 19 January 1998, when the parties were represented as follows:
The Government:
Ms Sally LANGRISH, Agent
Mr Peter DUFFY, QC, Counsel
Mr Alan DEWAR, Counsel
Mr Hussein KAYA, Adviser, Department of Trade and Industry
Mr Roger ALLEN, Adviser, Department of Trade and Industry
The applicant:
Mr Colin W. INNES, Solicitor
Mr James DRUMMOND YOUNG, QC, Counsel
The applicant also attended the hearing.
THE LAW
The applicant alleges a violation of Article 6 (Art. 6) of the
Convention. He claims that, although he was able to make
representations to the Secretary of State's civil servants, he was
never made aware of the precise nature of the source of the specific
allegations made against him, and in particular, that the court review
which was open to him was not of sufficient scope to comply with
Article 6 (Art. 6).
Article 6 para. 1 (Art. 6-1) of the Convention provides, so far
as relevant:
"In the determination of his civil rights and obligations ...,
everyone is entitled to a fair and public hearing ... by an
independent and impartial tribunal ..."
The Government make two preliminary objections as to
admissibility. First, the Government claim that the applicant failed
to seek disclosure of information from the Secretary of State and
further failed, albeit on legal advice, to pursue an appeal lodged with
the Inner House, thus failing to exhaust domestic remedies, as required
by Article 26 (Art. 26) of the Convention. Secondly, the Government
allege that the applicant received sufficient disclosure of the case
against him and thus cannot claim to be a victim under Article 25
(Art. 25). The Government claim that the applicant's challenge to
Section 60(4) of the 1982 Act, exempting the Secretary of State from
any obligation to disclose particulars of the grounds of objection, is
an "in abstracto" complaint against legislation and accordingly
inadmissible.
The Government further submit that the proceedings to establish
whether the applicant was a "fit and proper" person to be chief
executive of the company were not determinative of his "civil rights"
within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention.
The Government note that the proceedings considered the suitability of
the applicant for one particular post and did not preclude the
applicant from seeking any other posts in the industry and further that
the notice of objection prevented him from entering into a proposed
contract of employment and did not interfere with an already concluded
contract.
The Government consider that the proceedings as a whole in any
event complied with the requirements of Article 6 para. 1 (Art. 6-1)
and that there is no significant distinction to be made between the
present case and the case of Bryan v. the United Kingdom, judgment of
22 November 1995, Eur. Court HR, Series A no. 335, where no breach of
Article 6 para. 1 (Art. 6-1) was found.
The applicant replies to the Government's preliminary objections
by stating that no application was made for further disclosure by the
Secretary of State prior to the initial hearing as, due to
Section 60(4) of the 1982 Act, this would have been doomed to fail.
The applicant further states that no appeal was lodged against Lord
Osborne's judgment on the basis of legal advice that Lord Osborne's
interpretation of Section 60(4) of the 1982 Act, to the effect that the
Secretary of State was not obliged to disclose any further information
to the applicant, was correct and an appeal would be doomed to failure.
The applicant also states that his complaint is not a complaint "in
abstracto". Whilst his failure to obtain full particulars of the
allegations against him necessarily involved a consideration of Section
60(4) of the 1982 Act, the lack of notice went beyond the statute to
the heart of his complaint that the proceedings were not fair and in
breach of Article 6 para. 1 (Art. 6-1) of the Convention.
The applicant claims that the proceedings and the subsequent
notice of objection, which prevented him from taking up an offered
employment, did amount to a determination of his civil rights under
Article 6 para. 1 (Art. 6-1) of the Convention. He considers that the
distinction between preventing a proposed contract and interfering with
a concluded contract of employment is a distinction of form not
substance. He further states that the notice of objection in this case
has in reality also prevented him from being offered other posts in the
industry.
The applicant complains that Lord Osborne's review of the
fairness of the proceedings before the Secretary of State was limited
by the existence of Section 60(4) of the 1982 act, which provided that
the disclosure of particulars of the grounds of objection was not
required.
The Commission will first consider the preliminary objections
raised by the Government.
In connection with the Government's argument that the applicant's
complaints concerning Section 60 (4) of the 1982 Act are abstract
complaints and that the applicant may not claim to be a victim of a
violation of the Convention in this respect, the Commission notes that
a complaint in isolation as to the existence of the provision could not
form the basis of a complaint under the Convention. However, the
applicant's objections to Section 60 (4) form part of his allegations
of unfairness of the proceedings as a whole, and cannot be separated
from the complaint of unfairness. The Commission will therefore
consider the operation of Section 60 (4) in the case in the context of
the proceedings as a whole.
The Government also allege non-exhaustion of domestic remedies
in that the applicant failed to seek specific discovery of any
underlying information from the Secretary of State or the domestic
court, and that he failed to pursue his appeal before the Court of
Session. The question whether the applicant should have requested
disclosure of further information before the Secretary of State or the
Court of Session is closely connected with the substantive question of
whether the proceedings complied with the requirements of Article 6
para. 1 (Art. 6-1), and the Commission will consider it in that
context.
As to the applicant's failure to pursue his appeal before the
Court of Session, the Commission notes that counsel advised the
applicant that the Inner House would not construe Section 60 (4) in a
manner favourable to the applicant. The Commission recalls that under
Article 26 (Art. 26) of the Convention, normal recourse should be had
by an applicant to remedies which are available and sufficient to
afford redress in respect of the breaches alleged (see, for example,
Eur. Court HR, Akdivar and others v. Turkey judgment of 16 September
1996, Judgments 1996-IV, No. 15, p. 1210, para. 26). In particular,
Article 26 (Art. 26) requires an applicant to put the substance of his
Convention complaints to the domestic courts, in order to give them the
opportunity to redress the complaints (Eur. Court HR, Cardot v. France
judgment of 19 March 1991, Series A no. 200, pp. 18-19, paras. 34-36,
and Ahmet Sadik v. Greece judgment of 15 November 1996,
Reports 1996-V, No. 20, pp. 1653-1655, paras. 30-34). In the present
case, and unlike the cases of Cardot and Ahmet Sadik, the applicant put
the substance of his Convention complaints to the Court of Session, and
there is no indication that there were any realistic prospects of a
subsequent appeal being successful. Indeed, the Government accept that
Lord Osborne's interpretation of Section 60 (4) of the 1982 is correct.
It follows that the applicant had normal recourse to remedies
which were available and sufficient in respect of the breaches alleged,
and that he has not failed to exhaust domestic remedies.
As to the substance of the applicant's complaint, the Commission
must first ascertain whether Article 6 (Art. 6) is applicable to the
proceedings in the present case, that is, whether the proceedings
determined the applicant's "civil rights and obligations" within the
meaning of Article 6 para. 1 (Art. 6-1) of the Convention. The
Commission recalls in this connection the case of Kaplan v. the United
Kingdom (Comm. Rep. 17.7.80, D.R. 21, p. 5) which concerned a decision
of the Secretary of State to impose restrictions on the business of an
insurance company controlled by the applicant on the grounds that the
applicant was not a "fit and proper person" to be a controller of an
insurance company for the purposes of the Insurance Companies Act 1974.
The Commission considered that the decision of the Secretary of State,
following administrative procedures which similarly entitled the
applicant to make written and oral representations to officers of the
DTI as to the grounds of objection specified in a preliminary notice,
had a direct effect on the civil rights of the company of which the
applicant was the controller. The Commission found that the decision
did not affect the existing contractual rights and obligations of the
company which remained in being for the duration of the relevant
contracts. However, the direct legal effect of the Secretary of
State's action was that the existing "right" of the company to conduct
insurance business was restricted, in that the company was effectively
prohibited from entering into new business.
The Commission, however, drew a distinction between the acts of
a body which is engaged in the resolution of a dispute ("contestation")
and the acts of an administrative or other body purporting merely to
exercise or apply a legal power vested in it and not to resolve a legal
claim or dispute. Article 6 para. 1 (Art. 6-1) was held to apply to
the acts of the former but not to acts of the latter even if they
affected civil rights. The Commission found that, in taking his
decision, the Secretary of State had exercised legal powers which
affected civil rights but was not engaged in the determination of a
dispute or "contestation" concerning civil rights and obligations.
The Commission considers that the civil rights of the present
applicant were similarly affected by the decision of the Secretary of
State. The applicant had been offered the post of chief executive of
the company on terms which had been agreed between him and the company.
The effect of the decision was to prevent him from taking up that post
and had clear pecuniary implications for the applicant. It is true
that any agreement could only become operative once notice had been
served on the Secretary of State and the Secretary of State had either
stated that he had no objection to the appointment or had failed to
serve a notice of objection. Thus, the Secretary of State's decision
did not as such directly affect any existing right of the applicant to
conduct the business of the company as its chief executive. However,
the fact that the applicant's contractual right to occupy the post of
chief executive was made subject to there being no objection from the
Secretary of State did not in the view of the Commission alter its
character as a civil right for the purposes of Article 6 para. 1
(Art. 6-1) of the Convention. Further, the decision of the Secretary
of State directly affected the exercise of that right, even though the
applicant had not yet taken up the post as chief executive.
The Commission is further unable to accept the Government's
argument that the Secretary of State's decision did not affect the
civil rights of the applicant, first, because the decision only related
to his ability to take up a specific post and not his right to be
employed in the insurance industry generally and, secondly, because
during his interview with the officials of the DTI, the applicant
indicated that he would probably not have taken up the post in the
company in any event. The undisputed effect of the decision of the
Secretary of State was to deprive him of the opportunity of accepting
a specific post which had been offered on terms which had been agreed.
In the view of the Commission the applicant's civil rights were
affected by the decision, irrespective of whether the decision had
wider ramifications for the employment prospects of the applicant in
the insurance industry and irrespective of whether, in the result, he
would have declined the particular post in question.
The Commission further considers that the procedure by which the
Secretary of State actively intervened to prevent the appointment of
the applicant to the post which he had been offered amounted to a
"determination of [the] civil rights" of the applicant for the purpose
of Article 6 para. 1 (Art. 6-1). In the view of the Commission a
dispute or "contestation" arose from the moment when the Secretary of
State indicated that he was considering issuing a notice on the ground
that the applicant was not a fit and proper person and that preliminary
view was contested by the applicant. This dispute was determined in
the proceedings which followed, culminating in the decision of the
Secretary of State that the applicant was not a fit and proper person,
with the consequence that the applicant was precluded from taking up
the post offered to him. The proceedings therefore determined the
applicant's "civil rights and obligations" (see Eur. Court HR, Le
Compte, Van Leuven and De Meyere v. Belgium judgment of 23 June 1981,
Series A no. 43, pp. 20-22, paras. 44-50).
The Commission recalls that even where an adjudicatory body
determining disputes over "civil rights and obligations" does not
comply with Article 6 para. 1 (Art. 6-1) in some respect, no violation
of the Convention can be found if the proceedings before that body are
"subject to subsequent control by a judicial body that has full
jurisdiction and does provide the guarantees of Article 6 para. 1
(Art. 6-1)" (Eur. Court HR, Albert and Le Compte v. Belgium judgment
of 10 February 1983, Series A no. 58, p. 16, para. 29, referred to in
Eur. Court HR, Bryan v. the United Kingdom judgment of
22 November 1995, Series A no. 335-A, p. 16, para. 40).
It has not been suggested in the present case that the
proceedings before the Secretary of State's representatives complied
with Article 6 para. 1 (Art. 6-1) of the Convention, and the Commission
accepts that they did not.
The question is therefore whether the Court of Session satisfied
the requirements of Article 6 para. 1 (Art. 6-1) as far as the scope
of its jurisdiction is concerned, and whether the proceedings complied
with the "fairness" requirement of that provision.
It is common ground that the power of review of the Court of
Session was not capable of embracing all aspects of the decision of the
Secretary of State. In particular, as is not infrequently the case in
relation to administrative law appeals in the Member States of the
Council of Europe, the Court of Session could not substitute its own
view for that of the Secretary of State as to the fitness of the
applicant. On the other hand, the Court of Session could have quashed
the decision of the Secretary of State if, inter alia, the decision was
irrational, in the sense that it was a decision which no reasonable
minister properly directing himself could have reached on the basis of
the material before him, or if the decision was reached by reference
to irrelevant factors or without regard to relevant factors or in a
procedurally unfair manner.
In the case of Bryan, the European Court of Human Rights gave
examples of the matters which were relevant to assessing the adequacy
of the review on a point of law in that case: "the subject-matter of
the decision appealed against, the manner in which that decision was
arrived at, and the content of the dispute, including the desired and
actual grounds of appeal" (above-mentioned Bryan judgment, p. 17,
para. 45).
The subject-matter of the decision appealed against in the
present case was a classic exercise of administrative discretion. The
legislature had charged the Secretary of State with the express
function of ensuring, in the public interest, that only appropriate
persons would become chief executive of certain insurance companies,
and the contested decision in the present case was the exercise of that
discretion.
The manner in which the decision was arrived at is a matter of
particular concern to the applicant, as much of his argument is based
on the premise that the Secretary of State's decision was flawed by the
way in which the decision was reached: he claims that he was not given
full disclosure of the allegations against him, that the Secretary of
State's decision was not carefully reasoned, and that it was not even
clear what were the findings of fact of the DTI officials.
The content of the dispute is closely linked to the way in which
the decision was arrived at. Thus in his application for judicial
review, the applicant complained that the Secretary of State's
officials, in breach of their duty to act in accordance with the
principles of natural justice, had failed to give adequate information
to the applicant about the allegations which had been made against him.
In this connection the applicant makes particular complaint of the
provisions of Section 60 (4) of the 1982 Act which, he claims, hinders
discovery and hence disclosure of relevant information as to the
grounds of objection.
The Commission recalls that the Convention organs should confine
themselves as far as possible to examining the questions raised by the
case before them (see, in the context of administrative proceedings,
Eur. Court HR, Zumtobel v. Austria judgment of 21 September 1993,
Series A no. 268-A, p. 14, para. 32). Questions of the implications
of Section 60 (4) of the 1982 Act for other cases do not therefore fall
to be determined: the Commission must assess whether in the case before
it the applicant was given insufficient information as to the case he
had to answer to enable him to defend himself and whether, having
regard to Section 60 (4), the scope of review available to the
applicant was sufficient to enable him adequately to ventilate his
complaint about the administrative proceedings.
The Commission recalls that in the initial written statement
which accompanied his letter of 7 March 1994, the applicant set out his
comments on the three points raised by the Secretary of State in his
preliminary notice of 14 February. The Commission notes that, although
the covering letter stated that the allegations were "fairly general",
in his specific comments on the points, the applicant replied in some
detail to the points raised. The applicant's comments on point (b)
(that he had overruled actuarial advice in underwriting procedures)
were set out under the three headings, specified by the DTI. The
applicant knew nothing of an allegation that he had waived requirements
for personal medical attendance reports, but he replied to the other
allegations.
Save as regards the matter of the personal medical attendance
reports, the Commission finds no indication in the applicant's written
statement which accompanied his letter of 7 March 1994 that he was in
any way embarrassed or put at a disadvantage by an absence of
information as to the sources or further details of the complaints
against him.
As to the hearing before the DTI officials on 15 March 1994, the
Commission recalls that the applicant made a statement concerning his
former company and its financial position over the years when he was
involved with it, and his role in ensuring compliance with statutory
requirements. There followed a discussion of the applicant's role in
the former company during a period of financial difficulties, and then
the discussion turned to the applicant's relationship with the
underwriting department. The applicant repeated that he knew nothing
of any suggestion that medical reports should be waived, and saw no
problem with a company policy of increasing what was called "free
cover". At one point, the applicant's solicitor intervened to state
that the applicant was not aware of the allegation against him. The
official charing the meeting immediately replied that the information
had come from the appointed actuary, and continued to give details of
a policy for £1 million which had been granted in unusual
circumstances. The applicant accepted that he had tried to speed up
the procedures, but denied that he had circumvented any of the
procedures.
The final part of the interview dealt with the applicant's
relationship with the appointed actuary at the former company. It was
put to the applicant that he had, at least, discouraged the appointed
actuary from fulfilling his responsibilities to the DTI in late 1992.
The applicant, after explaining the financial problems, accepted that
he had encouraged the actuary to await a response on one point from the
shareholder before contacting the DTI over the company's solvency
problems, and also accepted that he had suggested that the actuary
should consider where his loyalties lay, but he was emphatic that he
never prohibited the actuary from contacting the DTI.
Having examined the applicant's written statement which
accompanied his solicitors' letter of 7 March 1994 and the transcript
of the hearing of 15 March 1994 the Commission thus finds that there
were no areas of substance in which the applicant was disadvantaged by
not knowing further details of the allegations against him. He had
evidently been in contact with the DTI before the statement which
accompanied the letter of 7 March, as he expressly stated that the "DTI
[had] advised that there [were] three headings to this category". It
is true that the applicant denied all knowledge of anybody having
waived personal medical attendance reports, and was given no further
details, but that matter was not pursued and does not appear to have
been considered relevant for the final decision. In the only passage
in the interview where the applicant, through his representative,
stated that he did not know of the allegations which were being made,
the official chairing the meeting immediately informed the applicant
that the evidence had come from the company's actuary. The applicant
made no further request about the source or content of the allegations.
The alleged inadequacy of the disclosure of the case against him
formed the principal ground of challenge in the applicant's proceedings
for judicial review of the Secretary of State's decision.
In his judgment Lord Osborne concluded that no material had been
relied on by the Secretary of State which had not been canvassed in one
way or another with the applicant. He further found that there had
been, prima facie, an extensive disclosure of the gist of the case
which the applicant had to answer: that disclosure went so far as to
indicate to the petitioner the source of the information which had come
into the possession of the Secretary of State, although the precise
terms of the information supplied by the source may not themselves have
been disclosed.
While it is true, as pointed out by the applicant, that Lord
Osborne also found that by virtue of Section 60 (4) of the 1982 Act
there was no obligation on the Secretary of State to disclose more
information, the Commission notes that the applicant has not
convincingly shown what further disclosure he required in order to
enable him adequately to meet the case against him. Moreover, as is
correctly pointed out by the Government, Section 60 (4) does not
preclude the giving of further particulars of the grounds of objection
by the Secretary of State, but merely provides that the Secretary of
State cannot be obliged to provide such particulars. The applicant
does not appear to have requested any further particulars from the
Secretary of State and, had he done so, there is nothing to suggest
that disclosure would have been refused. In this connection, the
Commission notes that on the sole occasion when the applicant's
representatives stated that the applicant was unaware of a specific
allegation, the source of the information was promptly given, and no
further inquiry was made.
The Commission accordingly considers that in the circumstances
of the present case the scope of review of the Court of Session was
sufficient to comply with Article 6 para. 1 (Art. 6-1).
Finally, the Commission notes that the applicant complains that
the decision of the Secretary of State was not fully reasoned and,
indeed, that it was not clear what was the factual basis for the final
notice of 31 March 1994. The Commission considers that this complaint,
too, is unsubstantiated. The applicant was first put on notice of the
matters which were felt to render him not a "fit and proper person" by
the letter of 14 February 1994, and those grounds were modified by the
final notice of 31 March 1994. The Commission considers that, taking
the contents of the two letters together with the contents of the
discussions on 15 March 1994, it must have been quite apparent to the
applicant on what basis the decision of 15 March 1994 had been taken.
It follows that the application must be rejected as manifestly
ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the
Convention.
For these reasons, the Commission, by a majority,
DECLARES THE APPLICATION INADMISSIBLE.
M. de SALVIA J.-C. GEUS
Secretary Acting President
to the Commission of the Commission