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