Last month the Accountancy & Actuarial Discipline Board published a consultation paper setting out the proposed changes to its Accountancy Disciplinary Scheme. The proposals have resulted from an in-depth review of the scheme and the lessons learned from the Mayflower case.

One proposal, the limitation of the circumstances in which the AADB can be ordered to pay costs, has attracted considerable comment.

What is being proposed is that the AADB should only be ordered to pay costs where we have been guilty of misfeasance ­ a serious abuse of our powers. It has been argued that, in practice, accountants who successfully defend an AADB complaint will have no means of recovering their costs. This may be true ­ but it should be remembered that the Court of Appeal has made it clear that there is a public interest in a disciplinary body being able to bring properly justified cases, and the fact a complaint is successfully defended does not justify an award of costs.

Other regulatory bodies, including the FSA, restrict the ability to recover costs and some, including the Joint Disciplinary Scheme, have no provision for recovery of costs.

The AADB investigates and prosecutes alleged misconduct in significant public interest cases. These cases need to be dealt with. They will often pit us against large firms and professional indemnity insurers who have almost unlimited resources to fight any disciplinary case. It is a ‘David against Goliath’ situation and it is not in the public interest for us to be deterred from pursuing cases by the risk of a ruinous costs award. Therefore, the ability to recover costs must be restricted.

At the same time, we must do what we can to ensure that complaints are properly brought and that accountants or firms do not face the expense and stress of disciplinary proceedings unless they are justified.

It is for this reason that the AADB has proposed that cases be subject to review by an independent Disciplinary Decisions Committee before any complaint can be brought.
In addition to considering the merits of the case, the DDC will consider whether a hearing is desirable. This additional layer of independent scrutiny will ensure that only those cases that should go to a disciplinary tribunal actually do.

These changes will ensure that members of the profession will not face disciplinary complaints unless these are properly justified.

Cameron Scott is executive counsel of the AADB