Firms' fury at tribunal costs plan

FRC plans to make claiming disciplinary cost almost impossible

Written by Penny Sukhraj

The FRC’s plans to ensure it will never pay costs on disciplinary cases offend ‘natural justice’, senior sources in the profession have said, as disillusionment with its new disciplinary body grows.

Last week, the Accountancy and Actuarial Discipline Board unveiled plans that would mean that defendants who clear their names will only receive costs if the AADB is guilty of ‘misfeasance’, thought to be an impossibly high barrier.

A senior member of the profession slated the idea this week, saying that ‘natural justice requires that whoever loses pays costs’.

‘Misfeasance’ constitutes an offence greater than simply negligence or the AADB finding its charges do not stick, but requires costs claimants to prove there has been some deliberate and dishonest use of office.

The proposals follow a £1m cost award to PricewaterhouseCoopers and others when the AADB’s case against the firm over Mayflower failed. At the time, claims for costs had not been budgeted for by the FRC.

The board has also proposed the formation of a Decisions Disciplinary Committee, which will also be subject to the rules regarding circumstances of ‘misfeasance’.

‘If they take us to a tribunal and win, then we pay the costs. Why shouldn’t it work the other way around? It seems a matter of principle that you don’t bear the costs if you haven’t done anything wrong. It is enshrined in law in the courts.’

The costs issue could lead to broader disillusionment with the tribunals process. The firms were not keen on the Joint Disciplinary Scheme, which also denied defendants costs.

Enjoyed this article? Help spread the word:

Comments

Reader comments for this story

White papers

Related jobs

Spotlight

Richard Atkinson, FD of All England Tennis Court

Profile: Richard Atkinson, FD of All England Tennis Club

As Wimbledon reaches a heady climax, the FD of All...

PwC 10-year anniversary special report

Relive how the controversial mega-merger of Price Waterhouse and Coopers...

Make partner fast with YP

The latest edition of Young Professional features our definitive guide...

Find your next job

Find your next job
Salary Checker

Newsletters

Sign up here for the very latest news delivered to your inbox. Choose from the following options:

Search white papers

Search white papers

Have your say

Has the credit crunch made you fear for your job?
Yes, my company says jobs will go
Maybe, if things get worse, I could be hit
No, business is quite stable

Job of the week

More finance jobs...

Your next job