PracticeConsultingFraudsters’ fast track

Fraudsters' fast track

Lord Chancellor proposes legal and professional co-operation to speed up fraud cases, reports Douglas Broom

Judges would be empowered to impose professional disciplinaryto speed up fraud cases. sanctions on accountants convicted of fraud under proposals unveiled by the Lord Chancellor last week.

Delivering the KPMG lecture in the City, Lord Irvine said that in fraud cases, decisions about how to penalise accountants should be taken out of the hands of their professional bodies in order to speed up the process.

At present, he said, accountants – particularly auditors of collapsed companies – could delay disciplinary action for years while criminal and civil court proceedings dragged on. Department of Trade and Industry cases could be heard by up to eight different tribunals, he said.

Calling for a system of ‘unified investigation, embracing punishment, deterrence and public-interest functions’, Lord Irvine said the current situation was ‘not dissimilar to the archetypal hole in the road, dug and redug in successive days to remedy the gas leak, electricity supply and gushing ruptured main.’

Under his proposals, everything from criminal sentencing to professional discipline and civil-law damages for those defrauded would be dealt with by the same judge at a single court hearing.

Police, DTI inspectors and the accountants’ Joint Disciplinary Scheme would work together to bring cases in front of a judge and two expert assessors, including representatives of the accountancy bodies who would help assess the appropriate disciplinary sanction.

ACCA director Anthony Booth said Lord Irvine failed to address the real problem, which was the inability of the existing legal system to secure fraud convictions.

‘We set a higher standard of conduct for our members and we make a broader assessment of what they have done. We could end up having to keep someone in membership just because they had been acquitted when they deserved to be kicked out,’ he said.

Chris Dickson, executive counsel to the JDS, welcomed Lord Irvine’s proposals, as did George Staple, former head of the Serious Fraud Office and chair of the English ICA’s Fraud Advisory Panel. Dickson said: ‘There should be as much unity as possible in the investigation process. There is no reason why you should not have someone from the regulatory body there as well.’

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