Mond v The Association of Chartered Certified Accountants

Professional disciplinary proceedings must comply with the disciplinary scheme governing the hearing. A charge must identify the applicable disciplinary ground clearly, particularly where different grounds carry materially different levels of seriousness and different procedural consequences. Where a member accepts negligence or incompetence but does not admit misconduct, a committee proceeding under an abbreviated admission procedure cannot make findings of deliberate or conscious impropriety without notice and an opportunity to respond. The presenting body must identify the case relied upon, while the committee must determine the charge fairly within the jurisdiction conferred by the regulations. A breach of trust caused by negligence or incompetence is not necessarily misconduct, although sufficiently gross negligence may justify a serious disciplinary penalty. The impugned findings and orders were quashed and the matter remitted to a differently constituted disciplinary committee.

The claimant, an insolvency practitioner and member of the Association of Chartered Certified Accountants, transferred surplus company voluntary arrangement funds into his firm’s disbursements account and failed for several years to resolve their destination or make required reports. He accepted that this conduct breached bye-law 8(a)(ii), but did not accept that it amounted to misconduct under bye-law 8(a)(i).

The charges were expressed in the alternative under both provisions. The disciplinary committee treated the first charge as misconduct and imposed a severe reprimand and a £40,000 fine. The appeal committee upheld the substance and seriousness of that conclusion. The claimant sought judicial review, principally alleging that the charges were defective and that he had not received a fair hearing.

1. The claim succeeded. The finding of misconduct and breach of bye-law 8(a)(i), together with the orders made by both committees, was quashed. The matter was remitted to a differently constituted disciplinary committee.
2. The disciplinary regulations distinguished between an admitted-charge procedure under Regulation 5(5) and a contested hearing under Regulation 5(6). The former permitted the committee to assess the seriousness of admitted conduct, but did not permit it to go behind the admissions or investigate unadmitted matters.
3. The claimant had admitted negligence, incompetence and breach of bye-law 8(a)(ii), but had not admitted misconduct or conscious impropriety. The committee therefore acted unlawfully in treating the case as one involving deliberate or conscious impropriety without giving him notice or an opportunity to defend that case. His advisers’ failure to object did not cure the unfairness.
4. Charges framed alternatively under bye-law 8(a)(i) and 8(a)(ii) were defective. The provisions involved materially different levels of seriousness and stigma. A member must be able to understand the case to be met and whether a charge is being admitted. The presenting body should identify the precise disciplinary ground and the matters relied upon.
5. Although misconduct was not equivalent to dishonesty, it was more serious than negligence or incompetence. The suggestion that deliberate or reckless impropriety would ordinarily be required for misconduct under bye-law 8(a)(i) provided a sensible distinction, while conduct falling under bye-law 8(a)(ii) could still justify a severe penalty where the facts warranted it. A breach of trust resulting from negligence or incompetence was not necessarily serious misconduct.
6. The appeal did not cure the defect. The appeal regulations did not permit an appeal against findings where only the order was challenged, and the original process had been conducted outside the proper regulatory procedure. Any reconsideration had to proceed on properly framed charges, with the lapse of time and the claimant’s admitted breaches taken into account.

First-instance judicial review in the Administrative Court. The court quashed the findings of misconduct and breach of bye-law 8(a)(i), and the orders made by the disciplinary and appeal committees, remitting the matter to a differently constituted disciplinary committee.