R (on the application of Coke-Wallis) v Institute of Chartered Accountants in England and Wales

The Supreme Court allowed the appellant's appeal on the ground that the Institute was barred by res judicata from bringing a second disciplinary complaint based on the same underlying conduct as a first complaint that had been finally determined on the merits. Key to the decision was the construction of the Institute's bye-laws: bye-law 4(1)(a) identifies the occurrence giving rise to disciplinary liability (an act or default likely to bring discredit), while bye-law 7(1) treats a qualifying conviction as conclusive evidence of such discreditable conduct rather than as the discreditable act itself. The court held that both complaints alleged the same act (the attempted removal of client records in breach of the Jersey direction), that the first tribunal had decided that complaint finally and on the merits, and therefore cause of action estoppel (res judicata) barred the second complaint.

The court rejected the creation by the judiciary of a public-interest exception to the strict application of cause of action estoppel in disciplinary proceedings and indicated that any such change is a matter for Parliament. The court did not express a concluded view on the separate abuse of process arguments because its res judicata conclusion made that head unnecessary.

Background and parties:

• The appellant, a member of the Institute, was convicted in Jersey in 2003 of failing to comply with a direction of the Jersey Financial Services Commission after being caught attempting to remove client records from Jersey.
• The Institute brought a disciplinary complaint (the "first complaint") relying on the conviction under bye-law 7(1) and alleging a breach of bye-law 4(1)(a). A tribunal dismissed that complaint on 19 April 2005 after finding the Jersey offence did not correspond to an indictable offence in England and Wales.
• The Institute later preferred a second disciplinary complaint (the "second complaint") alleging the same underlying misconduct (attempting to remove accounts books and records) but framed without sole reliance on the conviction. The appellant sought summary dismissal of the second complaint on grounds including autrefois acquit, res judicata and abuse of process.

Procedural history:

• The appellant challenged the tribunal's refusal to dismiss the second complaint by judicial review (Owen J dismissed the claim on 6 November 2008).
• The Court of Appeal refused relief ([2009] EWCA Civ 730) on 15 July 2009.
• A disciplinary tribunal subsequently heard the second complaint in December 2009 (in the appellant's absence), found it proved and ordered exclusion; those sanctions were stayed pending this appeal. Permission to appeal to the Supreme Court was granted.

Nature of the application / relief sought: The appellant sought summary dismissal of the second disciplinary complaint and judicial review of the tribunal's refusal to do so, on the grounds that successive proceedings relying on the same conduct were barred by autrefois acquit, res judicata (cause of action estoppel) or constituted an abuse of process.

Issues framed:

• How to construe bye-law 4 and bye-law 7: whether a qualifying conviction is itself the act or default referred to in bye-law 4(1)(a) or is only conclusive evidence of such an act.
• Whether the second complaint alleged the same cause of action as the first and, if so, whether it was barred by cause of action estoppel / res judicata.
• Whether disciplinary proceedings attract autrefois acquit principles or whether res judicata is the appropriate doctrine.
• Whether a public-interest exception to cause of action estoppel should be recognised in disciplinary proceedings.

Court's reasoning and conclusions:

• The court construed bye-law 4(1)(a) as identifying the act or default giving rise to liability and bye-law 7(1) as converting a qualifying conviction into conclusive proof of such an act; the conviction is evidentiary, not the substantive occurrence itself.
• On a fair reading both complaints alleged the same underlying discreditable conduct (attempting to remove files in breach of the Jersey direction). The Institute had chosen in the first proceedings to rely on the conviction alone and thus had a full merits hearing which concluded adversely to the Institute.
• All constituent elements of cause of action estoppel were satisfied (judicial character of the first decision, jurisdiction, finality on the merits, identity of cause, same parties), so the second complaint was barred by res judicata.
• The court declined to invent a public-interest exception to cause of action estoppel for disciplinary tribunals and indicated such policy decisions should be for Parliament.
• Because the res judicata conclusion disposed of the appeal, the court did not determine the abuse of process arguments.

Appeal allowed. The Supreme Court held that bye-law 7(1) makes a qualifying conviction conclusive evidence of discreditable conduct under bye-law 4(1)(a) but is not itself the discreditable act; the first disciplinary complaint and its dismissal were a final determination on the merits of the same underlying conduct as alleged in the second complaint, and cause of action estoppel (res judicata) therefore barred the Institute from proceeding with the second complaint. The Court declined to create a judicial public-interest exception to res judicata for disciplinary proceedings and did not decide the abuse of process point as it was unnecessary to the outcome.

Tribunal dismissed the first complaint after a merits hearing on 19 April 2005. The Institute pressed a second complaint and a differently constituted tribunal declined to summarily dismiss it on 7 December 2006. The appellant sought judicial review (dismissed by Owen J on 6 November 2008). Permission to appeal to the Court of Appeal was granted; the Court of Appeal dismissed the appeal ([2009] EWCA Civ 730) on 15 July 2009. A disciplinary tribunal subsequently found the second complaint proved and ordered exclusion on 9 December 2009; sanctions were stayed pending this Supreme Court appeal. The Supreme Court allowed the appeal on 19 January 2011 ([2011] UKSC 1).