FHDDS32280 | Approval, revoking the approval and variations: approval – Fit and proper test: reasonable and proportionate tests

A reasonable and proportionate decision

When you make a decision, you will have to show that it is reasonable and proportionate. And you will have to explain why you made that decision, with evidence, to the business.

Wednesbury Reasonableness

Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948]

This is the main test you must apply to any of your decisions. It means that you must not:

• take into account something irrelevant

• disregard something which is relevant

• act in a way that no reasonable body could have acted

Every time you make a decision which affects a business and their FHDDS application, you should ask yourself; “is the decision so unreasonable that no reasonable person in a position of authority would have arrived at it?”

In other words, you must look at all the relevant information to make a balanced, rational decision.

So, you will look at the fit and proper test, the detail provided in the application and all other business information available to you and weigh this up before you make your decision.

You can find out more about Wednesbury reasonableness in the Compliance Handbook at CH175230.

Proportionality test

Human Rights Act & Article 13 of ECHR

There are different criteria to test whether a decision is proportionate. You must be able to show that your decision:

• was suitable and necessary to achieve the desired objective

• has not imposed excessive burdens on the individual