The weak anagram in the title of this article reflects the fact that there has been a further, recent attempt to explain the meaning of integrity in the regulatory context, this time by the Jersey Financial Services Commission in its Guidance Note entitled “Integrity and Competence” ( ).

This article (i) considers the significance of a person lacking integrity, (ii) updates an article I wrote earlier this year on the judgment of Jersey’s Royal Court in Francis v JFSC 2017 JRC 203A, which considered the issue, (iii) reviews the JFSC’s subsequent Guidance Note and (iv) adds further commentary.

Significance of Integrity

The definition of integrity is important, because integrity is central to the JFSC’s regulation of financial services businesses and their principal persons. For example, under the Financial Services (Jersey) Law 1998 the JFSC may refuse to register a person, having regard to the integrity, competence, financial standing, structure and organization of the applicant.  Further, Principle 1 under each of the Codes of Practice issued by the JFSC requires that a registered person must conduct its business with integrity.


In the Francis case, Mr Francis had appealed to Jersey’s Royal Court against (among other matters) the JFSC’s decision to issue a direction prohibiting him from engaging in financial services business in Jersey and to issue a Public Statement to that effect.

The determinations by the JFSC had been made in June 2014, following an investigation and decision-making process lasting some three years. The appeal to the Royal Court was not heard until 2016 as a result of numerous interlocutory applications made by Mr Francis and as a result of delays caused by his ill health.  In a compendious judgment running to some 370 paragraphs, the Royal Court dismissed the principal appeal.

Mr Francis had complained that there was no basis for the JFSC to have made certain findings of fact against him. The Royal Court dismissed this complaint.

The background to these findings was Mr Francis’s various roles, including as CEO of the Horizon Group, a Jersey-based financial services business, in allowing a number of vulnerable individuals to invest large amounts of money into a company, Handmade Films (originally established by Beatle, George Harrison, and celebrated for having produced films such as the Life of Brian), which company was connected to Mr Francis and was in dire financial straits.

Mr Francis then complained that the findings of fact made against him (and upheld by the Court) did not justify the JFSC’s conclusion that he had acted with a “most serious lack of integrity” and “incompetence… of the most serious kind”.

Further, Mr Francis said that the finding of a lack of integrity amounted to a finding of dishonesty against him, and that there was insufficient evidence to prove that.  This led the Court to consider what is meant by a ‘lack of integrity’.


The Court referred to the JFSC’s view, supported by certain English cases, to the effect that there is a difference between dishonesty and a lack of integrity, and that a person may lack integrity even though not established as being dishonest. (Oben had previously highlighted this point in a briefing note:

However, the Court stressed that it had not heard full argument on this issue, and noted that there were conflicting English decisions on this point, in the context of disciplinary proceedings involving the Solicitors’ Regulatory Authority.

Ultimately, the Court concluded that it would proceed on the basis that the JFSC was correct and that dishonesty and lack of integrity are not the same.  It said that it found the following quotation, adopted by the JFSC, to be particularly helpful:


even though a person might not have been dishonest, if they lack either an ethical compass or their ethical compass to a material extent points them in the wrong direction, that person will lack integrity.”


Given that, and the fact that Mr Francis had previously taken no objection to the JFSC considering the standard of integrity judged against this interpretation, the Court did not regard as unreasonable the JFSC’s assessment of the severity of Mr Francis’s misconduct.

That said, the Court had some sympathy with Mr Francis’s submission that the ‘man in the street’ may well not appreciate that there is a difference, and would read a Public Statement containing a finding of a lack of integrity as amounting to a finding of dishonesty.  It strongly recommended that the JFSC publish a guidance note explaining the difference, so that the subjects of regulatory action know where they stand, and those reading the JFSC’s Public Statements fully appreciate their significance.

(Publication of the Royal Court’s judgment was delayed by almost six months: Mr Francis initially filed a notice of appeal to the Court of Appeal, but in mid-2018 he abandoned his appeal, on the basis that he was “not well enough, physically or financially, to continue” with it.)

JFSC’s Guidance Note: Integrity and Competence

The JFSC’s Guidance Note says that its approach to integrity is based on English legal authorities. It goes on to cite extracts from certain English cases. Those extracts suggest that a lack of integrity and dishonesty are not synonymous, but do not explain why. Indeed, they make it plain that integrity is “a concept elusive to define”.

The JFSC also says that it will in future be guided by the Court’s judgment in Francis, and refers to the passage cited above from the judgment.

In summary, the JFSC says that whether or not an individual has acted with integrity will be assessed on the particular facts of each case. However, it does give the following, non-exhaustive examples of behaviours which it says may indicate a lack of integrity:

  • Turning a blind eye to matters that should raise obvious concern or cause enquiry.
  • Failing to appreciate or manage conflicts of interest.
  • Preferring personal interests above those of the customer.
  • Producing misleading or back-dated documents.
  • Making statements to others on which they will or may rely with reckless disregard as to whether they are truthful or with wilful disregard to information contradicting the truth of such statements.
  • Failing to deal with the JFSC in an open, transparent and co-operative manner.
  • Failing to comply with the law, regulatory requirements and professional standards expected.


As regards the Francis case itself, it was somewhat alarming that the public was not told about Mr Francis’s misconduct until seven years after the start of the initial investigation. Admittedly, his apparent illness appears to have been a factor in the delays in bringing the dispute to a conclusion in the Royal Court.  But what is more perplexing is that during the intervening period the various interlocutory hearings were anonymised, and even after the Royal Court had delivered its judgment, the content was not published until Mr Francis abandoned his appeal.  A defendant charged with a criminal offence would not ordinarily be afforded such treatment.

It is also curious to note from the judgment that the JFSC labelled Mr Francis’s lack of integrity as “most serious”. There is no guidance as to what is meant by this qualitative assessment of integrity.

Turning to the definition of integrity itself, it is not immediately apparent how the passage relied upon by the Royal Court and the JFSC helps to narrow down the circumstances when an individual could properly be said to have acted with a lack of integrity but not dishonestly.

The Royal Court in Francis only considered this issue in a very cursory way, but referred to the definitions of dishonesty used in the context of civil liability for dishonest assistance.

In that context, in other cases the Royal Court has adopted the following definition of dishonesty from the English case of Barlow Clowes Intl Ltd v Eurotrust Intl Ltd [2006] 1 All ER 333:


“In considering whether a defendant’s state of mind was dishonest an inquiry into the defendant’s view about standards of dishonesty was not required. A defendant’s knowledge of a transaction had to be such as to render his participation contrary to normally acceptable standards of honest conduct. There was no requirement that he should have had reflections about what those normally acceptable standards were. Consciousness of the dishonesty required consciousness of those elements of the transaction which made participation transgress ordinary standards of honest behaviour; it did not also require the defendant to have thought about what those standards were.” (Nolan v Minerva Trust Company Ltd 2014 (2) JLR 117 and Cunningham v Cunningham 2009 JLR 227)


The Royal Court in Nolan described this as “an objective test of dishonesty”, just as the Royal Court in Francis described the test of ‘lack of integrity’ as being “an objective test alone”, namely one where a person’s own standards of honesty/integrity (say, Robin Hood’s) do not absolve them of blame. So far, so confusing.

It may be said that dishonesty in the context of regulatory/disciplinary or criminal proceedings should be assessed at a higher standard.  That was certainly true historically in criminal cases, but that suggestion seems to have been effectively quashed, in England at least, by the much publicised Supreme Court case of Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67.

It may be recalled that Mr Ivey had sued a casino for failing to pay him his winnings.  Mr Ivey had used a technique known as edge-sorting to help him win £7.7 million.  The casino refused to pay out on the basis that the technique was cheating under English law. Mr Ivey contended that cheating involved dishonesty, which could not be proved.

The Supreme Court held that Mr Ivey had cheated, and that dishonesty was not a necessary feature of cheating.

However, it went further.  It also said that, in the context of criminal proceedings, the previously established test for dishonesty was wrong. (In R v Ghosh [1982] 3 WLR 110 the English Court of Appeal held that the test for dishonesty had two parts: (i) whether according to the ordinary standards of reasonable and honest people what was done was dishonest; and (ii) if it was dishonest by those standards, whether the defendant himself must have realised that what he was doing was by those standards dishonest.)

The Supreme Court in Ivey concluded that there should be one unified test for dishonesty in both criminal and civil cases, as set out in Barlow Clowes (see the passage quoted above).

Given that the Jersey cases on dishonesty rely heavily on the judgments of the English courts, it is difficult to escape the conclusion that Jersey will at some point adopt the same position. That is to say, a unified test for dishonesty, which is largely objective (the subjective element being limited to considering what the defendant actually knew and believed about the facts).

This makes it all the harder to see how a distinction can be clearly drawn between dishonesty and a lack of integrity.

In this regard, one extract from an English Court of Appeal case this year, cited by the JFSC in its Guidance Note, says as follows:


“As a matter of common parlance and as a matter of law, integrity is a broader concept than honesty… Integrity is a more nebulous concept than honesty. Hence it is less easy to define, as a number of judges have noted. In professional codes of conduct, the term “integrity” is a useful shorthand to express the higher standards which society expects from professional persons and which the professions expect from their own members. See the judgment of Sir Brian Leveson P in Williams at [130]. The underlying rationale is that the professions have a privileged and trusted role in society. In return they are required to live up to their own professional standards. Integrity connotes adherence to the ethical standards of one’s own profession. That involves more than mere honesty. To take one example, a solicitor conducting negotiations or a barrister making submissions to a judge or arbitrator will take particular care not to mislead. Such a professional person is expected to be even more scrupulous about accuracy than a member of the general public in daily discourse. The duty to act with integrity applies not only to what professional persons say but also to what they do.” (Wingate & Anor v The Solicitors Regulation Authority [2018] EWCA Civ 366)


Nothing in this extract suggests that a lack of integrity might not amount to dishonesty. Indeed, it says that “integrity… involves more than mere honesty”. Further, the non-exhaustive examples of behaviours given by the JFSC in its Guidance Note and listed above do not appear to clarify any distinction.


The Jersey Court tasked the JFSC with explaining to the ‘man in the street’ the difference between a finding of a lack of integrity and a finding of dishonesty. It is not clear whether the Court will consider that objective has been met. But the JFSC should not be criticised for that. A clear explanation of the difference seems also to be beyond the English courts for the moment.

Pending further judicial clarification, and in order to avoid the potential concern identified by the Jersey Court about public perception, the JFSC may consider- for the time being at least- that it should reserve findings of a lack of integrity for circumstances where it can justify a finding of dishonesty, and otherwise rely on a finding of a lack of competence as a basis for regulatory intervention. But as matters stand, the Francis judgment amounts to a judicial endorsement of the approach taken by the JFSC on this issue.


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