Settlement and mediation in enforcement cases

Agreeing to settle with us is not the same as an out-of-court settlement in the commercial sense. An FCA settlement is a regulatory decision taken by us, the terms of which are accepted by the firm or individual concerned.

When we agree the terms of a settlement, we will carefully consider our statutory objectives and other relevant matters, such as the importance of sending clear, consistent messages through enforcement action. We will only settle in appropriate cases where the agreed terms result in acceptable outcomes. Redress to consumers who have been disadvantaged by a firm’s misconduct may be particularly important.

Unless there are exceptional circumstances, settlements that lead to a final notice or supervisory notice will result in some degree of publicity, unlike commercial out-of-court settlements, which are often confidential.

At our discretion, we may also agree a settlement with parties who admit they have committed a competition law infringement and agree to a streamlined procedure for the rest of the investigation. In that case we issue an infringement decision but impose a reduced penalty on the settling party.

Early settlements

Settling enforcement cases early is sometimes in the public interest. It can help both the industry and consumers by sending timely messages about the required standards. Early settlement may also result in consumers receiving compensation earlier than would otherwise happen. It can also save resources for the firm or individual and the FCA.

Discounts on fines

We have a discount scheme for cases that are settled early. If early settlement is reached on terms acceptable to us (bearing in mind our objectives and relevant guidance), we apply a discount to the financial penalty and any period of suspension or restriction. The discount is available on a sliding scale, depending on the timing of the settlement:

  • Stage 1 (early settlement stage – normally within 28 days of stage 1 starting): 30%
  • Stage 2 (up to the expiry of the period for making written representations to the Regulatory Decisions Committee): 20%
  • Stage 3 (up to the decision notice being issued): 10%

No discounts apply to any settlements after we issue a decision notice.

See the Enforcement information guide for more information.

Mediation

Mediation is a type of alternative dispute resolution we may use in appropriate cases to help settle disputes in a quick and cost-effective way. The process involves a neutral mediator helping the parties to negotiate a settlement.

The mediator will not offer an evaluation of each party's case, but will purely help with the negotiations. Mediation can, in appropriate cases, supplement informal settlement discussions and provide a way of progressing a case where the discussions are unlikely to lead to an agreed settlement.

Mediation can be used in many types of cases, but its role is limited in regulating financial services. It will usually only be appropriate in cases where settlement may not otherwise be achieved, or not achieved efficiently and effectively.

Mediation is unlikely to be suitable in some types of case, for example those involving allegations of criminal conduct or where we have to take urgent action.

When mediation takes place

Mediation may take place when both parties agree to it. There will usually be only one opportunity to mediate during the enforcement process.

For more information on our settlement and mediation process, please see our Enforcement information guide and the Decision procedure and penalties manual (DEPP)