Calls Grow for FCA to Review Historic Enforcement Cases Following Upper Tribunal Criticism of Expert Evidence

Serious questions are now being raised about the fairness of past Financial Conduct Authority (“FCA”) enforcement actions following the Upper Tribunal’s decision in the case of Heather Dunne and Richard Fenech.

In that case, the Upper Tribunal ruled that it would be unfair to admit certain FCA evidence as expert evidence because of concerns regarding conflicts and independence. The decision represents one of the most significant judicial criticisms of FCA evidential practice in recent years.

The ruling has potentially far-reaching implications for historic FCA enforcement action, particularly where findings against regulated individuals or firms relied heavily upon specialist opinion evidence, file reviews, compliance assessments, or retrospective expert analysis commissioned or advanced by the FCA.

The FCA has, for many years, relied upon expert and quasi-expert evidence in enforcement investigations involving pension transfer advice, suitability assessments, systems and controls, market conduct, financial crime compliance, and competence issues. In many cases, respondents faced career-ending sanctions, substantial financial penalties, prohibition orders, and severe reputational damage.

The Upper Tribunal’s findings now raise an important and unavoidable question:

How many individuals have been sanctioned on the basis of expert evidence that may not satisfy the independence and fairness standards identified in the Heather Dunne case?

There is now a compelling public interest in the FCA conducting an immediate review of all historic enforcement cases where expert evidence played a material role in the regulatory findings or sanctions imposed.

Such a review should consider:

• Whether the expert evidence used was genuinely independent;
• Whether experts had conflicts of interest or prior involvement with the FCA;
• Whether opinion evidence improperly crossed into advocacy;
• Whether respondents were afforded a fair opportunity to challenge the methodology and conclusions relied upon;
• Whether sanctions imposed remain safe and proportionate in light of the Upper Tribunal’s reasoning.

The issue is particularly important because the overwhelming majority of FCA enforcement cases never reach a fully contested Upper Tribunal hearing. Many firms and individuals settle proceedings under intense regulatory and financial pressure, often on the assumption that FCA technical evidence will carry decisive weight before the Tribunal.

The Heather Dunne decision demonstrates that such assumptions may not always be justified.

Confidence in the integrity of the regulatory system depends not only upon robust enforcement, but also upon fairness, independence, and procedural transparency. Where evidence central to enforcement action may now be regarded as inadmissible or compromised, there must be a mechanism to ensure affected individuals are not left without recourse.

This is not an argument against effective regulation or consumer protection. The FCA performs a critical role in maintaining market confidence and protecting consumers. However, the seriousness of FCA sanctions demands equally serious scrutiny of the evidential foundations upon which those sanctions are based.

A transparent review process would strengthen, not weaken, confidence in the regulatory system.

The Upper Tribunal has now made clear that expert evidence must be genuinely independent and fair if it is to justify serious regulatory findings. That principle should apply not only to future cases, but also to historic enforcement outcomes where similar evidence may have been relied upon.

The FCA should now confirm:

1. How many enforcement cases over the last decade involved expert evidence;
2. Which external experts or consultancy firms were repeatedly instructed or relied upon;
3. Whether any review mechanism will be established for affected individuals;
4. Whether existing FCA guidance on expert evidence and independence will now be revised.

The financial services industry, regulated professionals, and the wider public deserve clarity on whether past enforcement outcomes remain reliable in light of the Upper Tribunal’s findings.