DEC App 1.2 Settlement

If a person who is or may be subject to enforcement action wishes to discuss the proposed action with FSA staff on an informal basis, he may do so at any time during the enforcement process. This might be before the giving of a warning notice, before a decision notice, or even after referral of the matter to the Tribunal. 2The FSA and the person concerned should agree that discussions will take place on a "without prejudice" basis, and that neither party may subsequently rely on admissions or statements made in the context of the discussions, or documents recording the discussions. Neither FSA staff nor the person concerned may disclose to the RDC any such admissions or statements made by the other.21

The terms of any proposed settlement will:

1. (1)

   be put in writing and be agreed by FSA staff and the person concerned;

2. (2)

   include a statement of the facts and any breaches admitted by the person concerned and the proposed action to be taken; and

3. (3)

   be considered in accordance with the settlement decision procedure set out in DEC App 1.2.2A G2.

   2

1. (1)

   2The fact that the person subject to enforcement action agrees to a financial penalty or other outcome will not usually obviate the need for a statutory notice recording the FSA's decision to take that action.

2. (2)

   Where, however, the person subject to enforcement action agrees not to contest the content of a proposed statutory notice, the decision whether to give that statutory notice will be taken by senior FSA staff.

3. (3)

   The decision will be taken jointly by two members of the FSA's executive of at least director of division level (the settlement decision makers).

4. (4)

   One of the directors taking the decision will usually be, but need not be, the director of Enforcement. (In exceptional cases, the director of Enforcement may have been directly involved in establishing the evidence on which the decision is based and would not therefore be able to participate (see section 395(2) of the Act).)

5. (5)

   Statutory notice for these purposes:

   1. (a)

      means any statutory notice the giving of which would otherwise require a decision by the RDC;

   2. (b)

      includes a statutory notice associated decision.

1. (1)

   2The settlement decision makers will often participate in the without prejudice discussions exploring possible settlement. Their involvement may facilitate agreement between FSA staff and the person concerned and avoid the delay that might otherwise result from needing to explain the basis for any settlement reached.

2. (2)

   If the settlement decision makers have not been involved in the discussions, but an agreement has been reached, they may ask to meet the relevant FSA staff or the person concerned in order to assist in the consideration of the proposed settlement.

The settlement decision makers may2:

1. (1)

   accept the proposed settlement by issuing a decision notice, second supervisory notice1 or (where appropriate) notice of discontinuance based on the terms of the settlement; or

2. (2)

   decline the proposed settlement;

whether or not the2 settlement decision makers have met with the relevant FSA staff or the person concerned.

1. (1)

   2Where the settlement decision makers decline to issue a statutory notice despite the proposed settlement, they may invite FSA staff and the person concerned to enter into further discussions to try to achieve an outcome the settlement decision makers would be prepared to endorse.

2. (2)

   2However, if the proposed action by the FSA has been submitted to the RDC for consideration, it will be for the RDC to decide:

   1. (a)

      whether to extend the period for representations in response to a warning notice; or

   2. (b)

      if representations have been made in response to a warning notice, whether to proceed to give a decision notice.

If it is not possible to reach an agreed proposed settlement of the case by informal discussions, the person concerned may elect to submit the case to mediation.