One aspect of the duty on public bodies to act fairly is the need to ensure that decisions are not vitiated by actual or apparent bias. Apparent bias may arise (i) where the decision-maker appears to have a predetermined idea about what the outcome of a decision-making process should be, and (ii) where the decision-maker has some sort of interest in that outcome.
- Whether the circumstances of appointment to an appeal board will give rise to the appearance of bias depends critically on the particular facts surrounding the individual appointment.
- Self-regulating professional bodies must ensure that their regulatory and representative functions are kept separate to avoid creating the appearance of bias. Therefore those involved in the governance of a professional body cannot also sit on its regulatory tribunals.
Professional self-regulation and the risk of bias
ILEX is the professional organisation representing practising legal executives and trainees. One of its purposes is to promote and secure compliance with professional standards of conduct. It is governed by elected council members, who are automatically also made directors of ILEX. The council is led by a vice-president and a president. Its regulatory functions, including investigating and prosecuting disciplinary breaches, are undertaken by a wholly owned subsidiary, ILEX Professional Standards Limited (IPSL), on behalf of ILEX. The intention of forming IPSL was to put the investigatory and prosecutorial arms of regulation in a body separate from ILEX itself. However, under the governing rules, the tribunal hearing appeals from the disciplinary tribunal was required to include either the president or vice-president of the council.
The disciplinary proceedings against Mrs Kaur
Mrs Kaur was a student member of ILEX charged with misconduct before the ILEX Disciplinary Tribunal (the "DT"). She was convicted on one count. The DT hearing her case consisted of three members, two lay members and an ILEX council member. They found one of the charges against her proved. Mrs Kaur appealed against the DT's decision to the ILEX Appeal Tribunal (the "IAT") which heard and rejected her appeal. In accordance with the IAT's rules, the IAT consisted of two lay members and the council's vice-president.
Mrs Kaur sought judicial review of the decisions of the DT and the IAT, arguing that the presence of the ILEX council member/director on the DT and the council's vice-president on the IAT gave rise to apparent bias. There was no suggestion of actual bias, and there was no allegation that either of the individuals in question had been involved in the prosecution of Mrs Kaur.
Mrs Kaur argued that ILEX council members should be automatically disqualified from sitting on the DT or the IAT. She argued that it was the duty of each council member to ensure compliance with ILEX's professional standards, so that prosecuting disciplinary breaches was in their interest. Foskett J, who heard the application in the High Court, dismissed Mrs Kaur's application.
The Court of Appeal
Lord Justice Rix, delivering the judgment for a unanimous Court of Appeal, held in favour of Mrs Kaur and quashed the decisions of the DT and the IAT. He held that the creation of IPSL was not a sufficient guarantee of fair regulation. The doctrine of apparent bias and the principle that no judge should sit in his own cause could be seen as two strands of a single overarching requirement; that judges should not sit where there is a real possibility on the objective appearances of things, assessed by a fair-minded and informed observer, that a tribunal could be biased. The appearance of bias was not limited to members who had a role on the panel of the committee entrusted with a body's regulatory functions (in this case IPSL) but could be extended to members with representative and governing functions (here members of ILEX) since they were responsible for regulatory policies. Rix LJ considered the fact that most self-regulating professional bodies had moved towards complete insulation of their regulatory functions from their representative functions. In fact, ILEX itself had since Mrs Kaur's case was heard changed its arrangements so that members of the ILEX council no longer could serve on the DT or the IAT. Effective professional self-regulation required that self-regulating bodies kept regulatory and representation functions separate. Therefore, those principally concerned in the governance of ILEX could not also be members of its disciplinary or appeal tribunals.
Apparent bias in the context of financial regulation?
In a recent Privy Council case, the issue of apparent bias arose in the context of financial regulation. The appellant Bank of Belize Limited (BBL) appealed against a directive of the Central Bank of Belize, following a hearing by the Bank and Financial Institution Appeal Board (the Appeal Board) ordering it to repay US$10 million. The directive followed a finding that BBL had improperly diverted the funds to settle an outstanding guarantee obligation in relation to a loan. The funds had been gifted by the Venezuelan government to the previous Belizean government for various housing projects.
The Appeal Board was set up by the Prime Minister in accordance with the statutory provisions governing its appointment and composition. BBL argued that the presence of two lay members on the Appeal Board gave rise to the appearance of bias, as they had previously worked for the Central Bank and were nominated by the Finance Minister and Prime Minister, Mr Barrow on the recommendation of an ex-employee of the Central Bank. BBL argued that Mr Barrow had a personal interest in the case as he had expressed strong criticism of the previous government's financial arrangements and actions in relations to the missing US$10 million. It was also argued that the government, represented by Mr Barrow in his capacity as Prime Minister, had a strong interest in the outcome of the appeal.
No apparent bias
The majority of the Privy Council's Judicial Committee (Lord Brown dissenting) held that a fair-minded and informed observer, with a reasonable working grasp of how things were usually done and who was not unduly suspicious would not consider that there was a real possibility that the Appeal Board was biased. The majority placed particular emphasis on the fact that the Prime Minister was statutorily obliged to make the appointments and was not himself party to the hearing before the Appeal Board. Second, because of the small size of the Belizean population and its relatively few commercial banks, there was a limited pool of candidates with the required level of expertise. Further, each member was obliged to swear an oath prior to sitting on the Appeal Board, and there was no reason otherwise to question their impartiality.
In Kaur, the Court of Appeal robustly concluded that effective self-regulation is undermined if those engaged in the governance of a professional body are allowed to move from representative to regulatory functions by being permitted to sit on disciplinary or appeal tribunals. The BBL case contains a useful consideration of the degree of knowledge to be attributed to the "informed observer" and emphasises the fact-sensitivity of bias cases, and indeed cases relating to the fairness of decision-making by public authorities more generally.
R (on the application of Darsho Kaur) and (1) Institute of Legal Executives Appeal Tribunal 92) The Institute of Legal Executives  EWCA Civ 1168;
The Belize Bank Limited v The Attorney General of Belize and others  UKPC 36