Deloitte beats JDS rap and eyes costs

Deloitte is considering applying for costs after a landmark legal battle with
the Joint Disciplinary Scheme.

The row with the profession’s regulator appeared to have ended last week.
Martin Scicluna, Deloitte’s UK chairman, was cleared by a tribunal of charges
that he should have reported auditor Stephen Ives to the ICAEW for his conduct
during the audit of Capital Corporation in the 1990s.

A Deloitte spokeswoman said: ‘The JDS rules do not provide for costs. But the
institute rules and the AIDB rules would. We are considering our position.’

Scicluna’s vindication after a year with the allegations hanging over him is
thought to be unprecedented. JDS executive counsel Chris Dickson has never lost
a case.

The tribunal said in relation to the charges against Scicluna that ‘the
threshold of reporting, or not, is a matter for judgment and, as with other
judgment, there is a range of acceptability’.

It added that, if there was a duty to report, then it would fall on the then
senior partner and not on Scicluna. Deloitte’s senior partner at the time was
John Roques.

It is understood that Roques, who is retired, would not be further
investigated because the tribunal found it would not have been necessary for him
to report the matter even if it had fallen to him to do so.

On a separate charge, that Deloitte should have been fuller in its criticism
of a deteriorating control environment at Capital in the mid-1990s, the firm was
also cleared. Deloitte argued that its initial thought that the control
environment had deteriorated was not, in fact, an accurate representation of the
situation and later changed its assessment.

Accountancy Age and the JDS succeeded in overturning an injunction on
reporting the case in April.

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