Guidance for disciplinary sanctions · Section B5 below in relation to references and testimonials....

Guidance for disciplinary sanctions

GUIDANCE FOR DISCIPLINARY SANCTIONS

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FOR USE IN DISCIPLINARY PROCEEDINGS WITH EFFECT FROM 1 JANUARY 2019


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Section A: Introduction 4A1 Status of this guidance 4

Section B: General principles 5B1 The Public Interest 5

B2 The purpose of sanction 5

B3 Proportionality 6

B4 Mitigating and aggravating factors 6

B5 Guidance on considering testimonials and references 7

B6 Reasons 8

B7 The Statutory Auditors and Third Country Auditors Regulations 2016 8

B8 Statutory Auditors practising and/or operating in Ireland 9

Section C: The sanctions available and relevant factors for consideration 10C1 No further action 10

C2 Admonishment 11

C3 Reprimand 12

C4 Severe reprimand 13

C5 Exclusion from membership/ Removal from student or affiliate register 14

C6 Fines 15

C7 Compensation 16

C8 Waiver of fees 16

C9 Specified period not to be reckoned as part of approved accountancy experience 16

C10 Ineligible for membership for a specified period 16

C11 Ineligible to sit ACCA examinations for a specified period 16

C12 Disqualification from one or more examinations 17

C13 Orders relating to certificates, licences and future applications for membership 17

Section D: Referrals to Admissions and Licensing Committee 17D1 Member’s fitness and propriety to hold a certificate or licence or conduct ERA 17

D2 Any future application for a certificate or licence or to conduct ERA 18

D3 Any future application for membership. 18

Section E: Other issues relevant to sanction 19E1 Convictions and sanctions imposed by another professional body 19

E2 Dishonesty 20

E3 Seriousness of allegation 20

E4 Interim orders 20

Section F: Factors relevant to seriousness in specific case types 21

Section G: Table of sanctions available 23

Section H: Insolvency common sanctions guidance 24

Index


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SECTION A

IntroductionA0.1 AssociationofCharteredCertifiedAccountants(ACCA)hasproducedthisguidanceonthe

useofsanctionstoassistbothdisciplinarytribunalsandmembers.TheDisciplinaryCommittee(theCommittee)1shouldrefertothisguidanceineverycasewhenconsideringwhatsanction orcombinationofsanctions,ifany,toimposeonarelevantperson2.

A0.2 Thisguidance:

a. DescribesgeneralprinciplestheCommitteeshouldtakeintoaccountwhen consideringtheappropriatesanction;

b. Setsouttherangeofsanctionsavailable;

c. Describesrelevantfactorstobeconsideredand/ordecidedinrelation tothevarioussanctions;

d. Suggestscriteriatoapplywhenconsideringtheseriousnessofaparticularcase.

A1 Status of this guidanceA1.1 ThisguidanceprovidesacruciallinkbetweentwokeyfunctionsofACCAasaregulatorybody:

settingstandardsfortheaccountancyprofessionandtakingdisciplinaryactionwhenarelevantperson’sconductiscalledintoquestionbecausethosestandardshavenotbeenmet.

A1.2 Notalldeparturesfromthestandardssetwillresultindisciplinaryaction.Inthemajorityofcases,adisciplinaryhearingisunlikelytobejustifiedinthepublicinterestunlessthemember’sdeparturefromstandardsissosignificantthatitamountstomisconduct.Itisagainstthatbackgroundthatthisguidancehasbeendeveloped.

A1.3 Thisguidanceaimstopromoteconsistencyandtransparencyindecision-makingbytheCommittee.ItensuresthatallpartiesareawarefromtheoutsetoftheapproachtobetakenbyaCommitteetothequestionofsanction.Italsoprovidesguidanceonmitigationevidence,referencesandtestimonials.

A1.4 Becauseofthenatureoftherole,membersoftheCommitteemustalwaysexercisetheirownpersonaljudgementinmakingdecisions.However,toensureaconsistentapproachthosedecisionsshouldbemadewithintheframeworksetoutbyACCAinthisguidance.

A1.5 Nothinginthisguidanceshouldbetreatedasasourceoflegaladvicetoanyuseroftheguidance.Whenappropriate,theindependentLegalAdviserwilladvisetheCommitteeonquestionsoflaw,includingquestionsabouttheuseofthisguidance.Membersarerecommendedtoobtaintheirownlegaladvice.

1 References to the Disciplinary Committee include the Appeal Committee where applicable

2 Reference to relevant person includes members, students, affiliates and firms where appropriate


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SECTION B

General principlesB0.1 TheCommitteeshouldalwaysbearinmindthateachcaseisdifferentandshouldbedecided

onitsownuniquesetoffacts.

B0.2 Inconsideringwhatsanctions(ifany)toapply,theCommitteemusthaveregardtoboth:

a. Thepublicinterest;and

b. Themember’sowninterest.

B1 The Public InterestB1.1 Fortheavoidanceofdoubt,thepublicinterestincludes:

a. Theprotectionofmembersofthepublic;

b. ThemaintenanceofpublicconfidenceintheprofessionandinACCA;and

c. Declaringandupholdingproperstandardsofconductandperformance.

B2 The purpose of sanctionsB2.1 Itissettledlawthatthepurposeofsanctionsissuedbyaprofessionalregulatorybodyisnotto

bepunitivebuttoprotectthepublicinterest–R (on the application of Abrahaem) v General Medical Council 3.

B2.2 TheCourtofAppealinRaschid and Fatnani v The General Medical Council 4madeitclearthatthefunctionsofadisciplinarytribunalarequitedifferentfromthoseofa“a court imposing retributive punishment”.TheCourtofAppealwentontoconfirm,“the panel is then concerned with the reputation and standing of a profession rather than the punishment of a doctor”. Thepublicinterestmustbeattheforefrontofanydecisiononsanctionandthisincludesthecollectiveneedtomaintaintheconfidenceofthepublicintheaccountancyprofessionandtheparticularneedtodeclareandupholdproperstandardsofconductandperformance.

B2.3 In Bolton v the Law Society5theCourtsaid“the reputation of a profession as a whole is more important than the fortunes of an individual member of that profession”.

B2.4 Astheprincipalfunctionofsanctionsisnotpunitivebuttoprotectthepublicinterest,itfollowsthat“considerations which would ordinarily weigh in mitigation of punishment have less effect on the exercise of this jurisdiction.”6

B2.5 Theseprinciplesapplyequallytotheaccountancyprofession.

B2.6 Althoughthedisciplinaryprocesslooksbackonamember’spastconduct,theCommitteealsoneedstohaveinmindthemember’sfutureconductinordertoensurethatthesanctionsimposedwillbeeffectivetoachievetheirpurpose.Thesewillincludeconsiderationssuchasencouraginganimprovementinstandardsandachievingadeterrenteffectinrelationtofutureconduct.

3 R (on the application of Abrahaem) v General Medical Council [2004] EWCH 279 (Admin)

4 Raschid and Fatnani v The General Medical Council [2007] EWCA Civ 46

5 Bolton v the Law Society [1994] EWCA Civ 32

6 Bolton v Law Society [1994] EWCA Civ 32


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B3 ProportionalityB3.1 Thesanctionineachcasemustdemonstrateaconsideredandproportionatebalancebetween:

a. Thepublicinterest(whichisnotnecessarilythesameastheinterestsofthepublic);

b. TheinterestsoftheACCAmembershipasawhole;

c. Theinterestsoftheparticularmemberinthecase;

d. Theseriousnessofthecase;and

e. Themitigatingandaggravatingfactorsinthecase.

B3.2 Anyinterferenceinamember’sprofessionalstandingandabilitytopractisemustbenomorethantheminimumnecessarytoupholdthepublicinterest.TheCommitteemuststrikeafairbalancebetweentherightsoftherelevantpersonandthepublicinterest7.ThisisnecessaryinordertocomplywithArticle8oftheEuropeanConventiononHumanRights,whichprotectstherighttoprivateandfamilylife.

B3.3 ActingproportionatelyrequirestheCommitteetoconsiderallsanctionsavailabletotheminascendingorderofseriousness.Thisisoftenreferredtoasthe‘bottomup’approach.

B.3.4 Beforefinalisingitsdecisiononsanction,theCommitteeshouldalwayssatisfyitselfthatthesanction,orcombinationofsanctions,ithasdecidedtoimposeisboth:

a. Sufficient;and

b. Nomorethanisnecessarytoachievethepurposeofsanctions.

B3.5 ItisalsogoodpracticefortheCommitteetoexplainwhyitisnotnecessarytoimposeamoreserioussanctionthantheonetheyhavechosen,andtorefertothenextmostseveresanctiontosatisfythemselvesthatthesanctiontheyhavechosenisproportionateandcorrect.

B4 Mitigating and aggravating factorsB4.1 Aspartofaproportionatedecision-makingprocess,theCommitteewillneedtopaydue

regardtothemitigatingandaggravatingcircumstancesinacase,andanyevidencepresented.Theyshouldbeconsideredagainstthefundamentalpurposeofsanctionsassetoutabove.

B4.2 Therearetwotypesofmitigatingandaggravatingfactorswhichwillaffectthesanctionimposedinaparticularcase:

a. Factorswhichpertainedatthetimeofthemisconduct,whichshouldbetakenintoaccountwhenformingaviewoftheseriousnessofthecase;

b. Factorspertainingtocurrentcircumstances,whichbecomerelevantwhentheCommitteegoesontoconsiderwhichsanctionorcombinationofsanctionsisappropriate.

7 Huang v Secretary of State for the Home Department [2007] UKHL 11


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B4.3 Mitigationcanbeconsideredunderthefollowingcategories(thesearenotexhaustive):

a. Evidenceofmember’sadherencetogoodpractice;

b. Evidenceofinsightandunderstandingandeffortsmadetoaddresstheparticular failingand/orwrongdoing;

c. Personalmitigation,suchasperiodsofstress,illness,levelofsupportifinworkplace.

B4.4 Mitigationcanbepresentedbywayofpersonalevidence,referencesandtestimonials.

B4.5 Aggravatingfactorsmayinclude(againthelistisnotexhaustive):

a. Lackofinsight;

b. Harmoradverseimpact;

c. Apatternofmisconductoveraperiodoftime;

d. Previousdisciplinaryhistory.

B4.6 ExamplesofmitigatingandaggravatingfactorswhichrelatetospecificcasetypescanbefoundinSection F.Whereanymatterislistedasamitigatingfactor,theconverseshouldbetreatedasanaggravatingfactor,andviceversa.

B4.7 TheCommitteewillneedtosatisfyitselfthatthereisevidencetosupportanyfindingsitmakesinrelationtobothmitigatingandaggravatingfactors,andmustassessthecredibilityofsuchevidence.ExamplesofthefactorstotakeintoaccountwhenassessingcredibilityaresetoutinSection B5belowinrelationtoreferencesandtestimonials.

B5 Guidance on considering references and testimonials B5.1 Inrelationtomitigationpresentedbywayofreferencesandtestimonials,Committeesmust

firstconsiderwhetherthesearegenuineandcanbesafelyreliedupon.Factorsrelevanttothisconsiderationmayinclude:

a. HasACCAhadanopportunitytoverifythereferenceand/ortestimonial,ifconsideredappropriate?

b. Isitsignedbytheauthor?

c. Isitdifferentinstyleandlanguagefromotherreferencesandtestimonialsproduced?

d. Istheauthorawareoftheallegationsunderconsiderationandthatthereference/testimonialistobeprovidedtotheCommittee?

e. Istheauthorappropriatelyqualifiedtocommentonthemattersthathaveformedthebasisoftheallegations?

f. Towhatextentdoestheauthoractuallyaddressthemattersthatinformthefactualallegationsandconcernsthatflowfromthoseallegations?

g. Whereappropriate,isthereferenceonheadedpaper?

B5.2 TheCommitteewillgivesuchweighttoreferences/testimonialsasisappropriateinthecircumstancesofthecase.


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B6 ReasonsB6.1 TheCommitteemustgivereasonsforitsdecisiononsanction.Thereasonsshould

clearlyexplain:

a. TheinterestsandfactorstheCommitteetookintoconsiderationinarrivingatitsdecision;

b. Theweightitattachedtothoseinterestsandfactors;

c. HowthebalancingofthoseinterestsandfactorsledtheCommitteetoitsdecision.

B6.2 ItisimportantthattheCommittee’sdeterminationonsanctionmakesclearthatithasconsideredalltheoptionsandprovidesclearandcogentreasons(includingmitigating andaggravatingfactorsthatinfluenceditsdecision).

B7 The Statutory Auditors and Third Country Auditors Regulations 2016 (SATCAR)

B7.1 TheStatutoryAuditorsandThirdCountryAuditorsRegulation2016(SATCAR)cameinto forceasof17June2016.ThelegislationconveysspecificdutiesontheFinancialReportingCouncil(FRC)astheCompetentAuthority.FRCdelegatesspecificdutiestoACCAaspart ofadelegationagreementsignedinJune2016.

B7.2 TheSATCARprovisionsarerelevanttoDisciplinaryCommittee,AdmissionsandLicensingCommittee,InterimOrdersCommittee,HealthCommitteeandAppealCommitteeincasesconcerningstatutoryauditorspractisingand/oroperatingintheUnitedKingdom.

B7.3 Regulation5(1)ofSATCARintroducesanumberofadditionalsanctionsavailabletoaCommitteewhereanauditorhascontravenedarelevantrequirement.

B7.4 Regulation5(3)ofSATCARrequiresthatthe[relevant]Committee:

‘ In determining the type and level of sanctions to be imposed under this regulation, the competent authority must take into account all relevant circumstances, including:

(a) the gravity and duration of the contravention;

(b) the Auditor’s degree of responsibility;

(c) the Auditor’s financial strength;

(d) the amount, so far as can be determined, of profits gained or losses avoided by Auditor;

(e) the extent to which Auditor has co-operated with the competent authority;

(f) any previous contravention by Auditor of a relevant requirement.’

B7.5 Regulation6(3)ofSATCARprovidesfourgroundswherearelevantperson’s(anauditorpractisingand/oroperatingintheUKonly)nameshouldnotbepublished.8

8 Additional information available in ACCA’s Guidance on Publicity document


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B8 Statutory Auditors practising and/or operating in IrelandB8.1 Directive2014/56/EUoftheEuropeanParliamentandoftheCouncilof16April2014amending

Directive2006/43/EConstatutoryauditsofannualaccountsandconsolidatedaccounts(“theDirective”)cameintoforceasof17June2016.ThelegislationconveysspecificdutiesonIAASAastheCompetentAuthorityaswellasACCAasaRecognisedAccountancyBody.

B8.2 TheprovisionsoftheDirectivearerelevanttoDisciplinaryCommittee,AdmissionsandLicensingCommittee,InterimOrdersCommittee,HealthCommitteeandAppealCommitteeincasesconcerningstatutoryauditorspractisingand/oroperatinginIreland.

B8.3 Article30(b)oftheDirectiveprovidesthatwhendeterminingthetypeandlevelofadministrativesanctionsandmeasures,competentauthorities(andrelevantACCACommittees)aretotakeintoaccountallrelevantcircumstances,includingwhereappropriate:

(a) thegravityandthedurationofthebreach;

(b)thedegreeofresponsibilityoftheresponsibleperson;

(c) thefinancialstrengthoftheresponsibleperson,forexampleasindicatedbythetotalturnoveroftheresponsibleundertakingortheannualincomeoftheresponsibleperson,ifthatpersonisanaturalperson;

(d)theamountsoftheprofitsgainedorlossesavoidedbytheresponsibleperson,insofarastheycanbedetermined;

(e)thelevelofcooperationoftheresponsiblepersonwiththecompetentauthority;

(f) previousbreachesbytheresponsiblelegalornaturalperson.

Additionalfactorsmaybetakenintoaccountbycompetentauthorities(andrelevantACCACommittees),wheresuchfactorsarespecifiedinnationallaw.

B8.4 InrelationtopublicityincasesconcerningStatutoryAuditorspractisingand/oroperatinginIreland,thedefaultpositionisthattheDisciplinaryCommittee’sreasonsfordecision,includingdetailsinrelationtotheidentityoftherelevantpersonandanysanctionsorpenaltiesimposedwillbedisclosedtothepublic.

B8.5 TheseprovisionsareadditionallyrelevanttoAdmissionsandLicensingCommittee,andAppealCommitteeincasesconcerningstatutoryauditorspractisingand/oroperatinginIreland.

B8.6 TheDisciplinaryCommitteewillnotissueadirectionthattheidentityoftherelevantpersonshouldbemadeavailabletothepublicwhereitconsidersthatdisclosureoftheidentityoftherelevantperson:

(a)mayhaveanadverseimpactontheinterestsofthirdparties;

(b)mayhaveanadverseimpactonthehealthorsafetyofamembersuchthatpublicationwouldbeundulyharsh;

(c) isnotnecessaryforthepublicationofthepublicinteresthavingregardtothenatureandseriousnessoftheoffence;inthisregardtheDisciplinaryCommitteeshouldtakeintoconsiderationthefollowing:

(i) whethertheoffenceconcerneddishonesty,integrity,theft,fraud,negligence,recklessnessorincompetence;

(ii) anylikelyconsequencesofnon-disclosure;


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(iii) thesanctionimposed;

(iv) thelikelihoodoftherepetitionoftheoffence;

(v) thedisciplinaryhistoryoftherelevantperson;and

(vii) anyothercircumstancesorfactoritconsidersrelevant.

B8.7 Theremustbesufficientreasonstojustifymakingadirectionthattheidentityoftherelevantpersonshouldnotbemadeavailabletothepublic;essentially,thecasemustcrossahighthresholdtosatisfyoneormoreoftheexceptionsdenotedabove.However,wheretheDisciplinaryCommitteeexercisesitsdiscretioninthismanneritwillsetoutinwritingthereasons for the decision.

B8.8 PublicityofsuchsanctionswillbepublicisedbyACCAassoonaspossibleandwillbemadeavailableonACCA’swebsiteforatleastfiveyearsfromthedateofthesanction,orwherethesanctionhasbeenappealed,atleastfiveyearsfromtheconclusionofthatappeal,orsuchlongerperiodasisproportionatetothebreachinquestion.9

SECTION C:

The sanctions available and relevant factors for considerationC0.1 TherelevantregulationsaresetoutinComplaintsandDisciplinaryRegulation13whichcanbe

foundintheACCARulebookat:

www.accaglobal.com/uk/en/about-us/regulation/rulebook.html

C0.2 Havingfoundamemberguiltyofmisconductorotherwiseliabletodisciplinaryaction,arangeofsanctionsandordersareavailabletotheCommittee.

C0.3 TheCommitteeshouldconsiderallpossiblesanctionsand/orcombinationsofsanctionsavailabletoitineverycase.Aspreviouslystated,theCommitteeshallconsidertheleastserioussanctionfirst(includingthetakingofnofurtheraction);theCommitteemaymakeoneormoreordersagainsttherelevantperson.

C1 No further action C1.1 TheregulationsdonotrequiretheCommitteetoimposeasanctionineverycase.Itisopen

totheCommitteetoconcludeacasewithouttakingfurtheraction.Thisshouldalwaysbethestartingpoint.

C1.2 However,iftheCommitteedecidestotakenoactionitmustbesatisfiedthatitisinthe publicinteresttoimposenosanctionandmustmakeitclearinitsreasonshowitcame to that decision.

C1.3 Havingconsideredthegeneralprinciplessetoutabove,iftheCommitteedecidesthattakingnoactionwouldbeinappropriate,itshouldconsiderthelowestavailablesanction.

9 Additional information available in ACCA’s Guidance on Publicity document

https://www.accaglobal.com/uk/en/about-us/regulation/rulebook.html


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C2 Admonishment C2.1 Thissanctionmaybeappropriatewheremostofthefollowingfactorsarepresent.Itshouldbe

rememberedthatthislistisnotexhaustive.

a. Evidenceofnolossoradverseeffectonclient/membersofthepublic;

b. Earlyadmissionofthefactsalleged;

c. Insightintofailings;

d. Isolatedincident;

e. Notdeliberate;

f. Genuineexpressionofremorse/apology;

g. Correctivestepshavebeentakenpromptly;

h. Subsequentworksatisfactory;

i. Relevantandappropriatetestimonialsandreferences.

C2.2 Beforemakingafinaldecisionunderthissanctionandhavingconsideredthegeneralprinciplesandfactorsabove,theCommitteemustdecidewhetheranAdmonishmentisasufficientsanctioninallthecircumstancesofthecase,eitheronitsownorincombinationwithanyotherorderavailableundertherules,suchasafine.

C2.3 Ifitconsidersthissanction(onitsownorcombinedwithanyotherorderitcouldimpose)issufficient,thentheCommitteemuststopatthispointandimposethissanction.

C2.4 Ifitconsiders,havingregardtoallthecircumstances,thatthissanction(combinedwithanyotherorderitcouldimpose)isinsufficient;itshouldconsiderthenextavailablesanction.

C2.5 Itisnotpossibletosayinwhatcircumstancesasanctionistoberegardedasinsufficient,particularlyifmanyoftherelevantfactorsarepresent,butoneexamplemightbetheseriousnessoftheallegationitself.Thismeansthateventhoughalloftheabovefactorsarepresent,theseriousnessoftheallegationmeansthatanAdmonishmentisinsufficient.

C2.6 ForfurtherinformationonmattersACCAconsiderstobeserious,pleaseseeSectionF.


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C3 ReprimandC3.1 Thissanctionwouldusuallybeappliedinsituationswheretheconductisofaminornatureand

thereappearstobenocontinuingrisktothepublic.Itwouldalsobeexpectedthatthereissufficientevidenceofanindividual’sunderstandingandgenuineinsightintotheconductfoundproved.Thissanctionmaybeappropriatewheremostofthefollowingfactorsarepresent.Itshouldberememberedthatthislistisnotexhaustive:

a. WillingnesstocomplywithdirectionsandadviceprovidedbyACCA;

b. Failureorconductinquestionistheresultofmisfortune;

c. Conductwasnotindeliberatedisregardofprofessionalobligations;

d. Periodoverwhichmisconducttookplacewasshortanditwasstoppedassoonaspossible;

e. Therehasbeenearlyandgenuineacceptancethatmisconducthadbeencommitted;

f. Therehasbeennoorverylittleadverseconsequence–ithasnotcausedmaterialdistress,inconvenienceorloss;

g. Earlyadmission.

C3.2 Havingconsideredthegeneralprinciplesandfactorsabove,theCommitteemustdecidewhetheraReprimandisasufficientsanction,eitheronitsownorincombinationwithanyotherorderavailableundertherules,suchasafine.IftheCommitteedecidesthataReprimand(onitsownorcombinedwithanyotherorderitcouldimpose)issufficient,itshouldstopatthispointandimposethissanction.

C3.3 However,iftheCommitteeconsidershavingregardtoallthecircumstancesthataReprimand(combinedwithanyotherorderitcouldimpose)isinsufficient,itshouldconsiderthenextavailablesanction.

C3.4 Itisnotpossibletosayinwhatcircumstancesasanctionistoberegardedasinsufficient,particularlyifmanyoftherelevantfactorsarepresent,butoneexamplemightbetheseriousnessoftheallegationitself.Thismeansthateventhoughalloftheabovefactorsarepresent,theseriousnessoftheallegationmeansthataReprimandisinsufficient.

C3.5 ForfurtherinformationonmattersACCAconsiderstobeserious,pleaseseeSectionF.


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C4 Severe reprimandC4.1 Thissanctionwouldusuallybeappliedinsituationswheretheconductisofaseriousnature

butthereareparticularcircumstancesofthecaseormitigationadvancedwhichsatisfytheCommitteethatthereisnocontinuingrisktothepublic,andthereisevidenceoftheindividual’sunderstandingandappreciationoftheconductfoundproved.Thissanctionmaybeappropriatewheremostofthefollowingfactorsarepresent.Itshouldberememberedthatthislistisnotexhaustive:

a. Themisconductwasnotintentionalandisnolongercontinuing,thoughthemembermayhaveactedrecklessly;

b. Evidencethattheconductwouldnothavecauseddirectorindirectharm;

c. Insightintofailings;

d. Genuineexpressionofregret/apologies

e. Previousgoodrecord

f. Norepetitionoffailure/conduct–itwasanisolatedincident

g. Rehabilitative/correctivestepstakentocuretheconductandensurefuture errorsdonotoccur

h. Relevantandappropriatereferences

i. Co-operationduringtheinvestigationsstage.

C4.2 Havingconsideredthegeneralprinciplesandfactorssetoutabove,theCommitteemustdecidewhetheraSevereReprimandisasufficientsanction,eitheronitsownorincombinationwithanyotherorderavailableundertherules.IftheCommitteedecidesthataSevereReprimand(onitsownorcombinedwithanyotherorderitcouldimpose)issufficient, itshouldstopatthispointandimposethissanction.

C4.3 IftheCommitteeconsidersaSevereReprimand(combinedwithanyotherorderitcouldimpose)isinsufficient,itshouldconsiderthenextavailablesanction.

C4.4 Itisnotpossibletosayinwhatcircumstancesasanctionistoberegardedasinsufficient,particularlyifmanyoftherelevantfactorsarepresent,butoneexamplemightbetheseriousnessoftheallegationitself.Thismeansthateventhoughalloftheabovefactorsarepresent,theseriousnessoftheallegationmeansthataSevereReprimandisinsufficient.

C4.5 ForfurtherinformationonmattersACCAconsiderstobeserious,pleaseseeSection F.


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C5 Exclusion from membership/Removal from the student or affiliate registers

C5.1 Thissanctionislikelytobeappropriatewhenthebehaviourisfundamentallyincompatiblewithbeingamember.Thisisthemostserioussanctionthatcanbeimposedonamember.TheCommitteeisalsoentitledtoconsiderwhethertoimposeafinealongsidethissanctionandanyotherorderavailableundertherules.Exclusionmaybeappropriatewhentheconductinvolvesanyorallofthefollowingcircumstances(thislistisnotexhaustive):

a. Seriousdeparturefromrelevantprofessionalstandards,suchasrepeateddefectivework;

b. Actuallossoradverseimpactonclientand/ormembersofthepublic;

c. Abuseoftrust/position;

d. Dishonesty;

e. Lackofunderstandingandinsightintotheseriousnessoftheacts/omissionsandtheconsequencesthereof;

f. Conductcontinuedoveraperiodoftime;

g. Affectedorhadthepotentialtoaffectasubstantialnumberofclients/members ofthepublic;

h. Attemptedtocoverupthemisconduct;

i. Persistentdenialmisconduct;

j. Breachofregulatoryorder;

k. Convictionsorcautionsinvolvinganyoftheconductsetoutabove;

l. Collusiontocoverupconduct.

C5.2 ForfurtherinformationonmattersACCAconsiderstobeserious,pleaseseeSection F.

Minimum period of exclusion

C5.3 ACCA’sMembershipRegulations(Regulation14(2))currentlyrequirethatwhereamember/studenthasbeenexcluded/removed,hemaynotapplyforreadmissionuntilaminimumof12monthsaftertheeffectivedateoftheexclusion/removal.

C5.4 TheCommitteehasthepowertoextendthatperiodbycombininganexclusion/removalorderwithanorderthatnoapplicationforreadmissionmaybeconsidereduntilaminimumperiod(ofnomorethanfiveyears)hasexpired.TheperiodcommencesontheeffectivedateoftheCommittee’sorder.

C5.5 Notethatthisdoesnotmeanthatthemember/studentisautomaticallyreadmittedaftertheexpiryoftheperiod,asitisnotasuspension.Thedecisionastowhetheradisciplinedmember/studentissuitabletobereadmittediswithinthesolediscretionoftheAdmissionsandLicensingCommittee.

C5.6 NotealsothattheCommitteedoesnothavethepowertoimposeanyadditionalconditionsuponreadmission,asthatwouldbeamatterfortheAdmissionsandLicensingCommitteewhichwouldconsideranysuchapplicationforreadmission.


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C6 FinesC6.1 Thissanctionisnotavailableformattersinvolvingstudentsoraffiliates.

C6.2 Afineofupto£50,000maybeimposed.Theleveloffinewillprimarilyreflectthegravityofthemisconductinquestion,butshouldalsoreflectanyfinancialbenefitobtainedbythemember.

C6.3 Factorswhichshouldbeconsideredinordertodeterminewhetherafineisanappropriatesanctioninclude:

a. Ifdeterrencecannotbeeffectivelyachievedbyissuinganothersanctionsuchasreprimandorseverereprimandalone;

b. Iftheindividualhasderivedanyfinancialgainorbenefit(includingavoidanceofloss)asaresultofthemisconduct;

c. Ifthemisconductinvolvedcausedorputatriskthelossofsignificantsumsofmoney;

d. Thevalueoftheengagement,thesizeofthefeeandanycommissionoranyotherreward;

e. Theamountofanycostsorfeeswhichtheindividualhasavoidedincurringorpaying, whichoughttohavebeenincurredorpaidhadregulationsorprofessionalstandards beencompliedwith;

f. Whethertheindividualcausedorencouragedotherindividualstocommit reprehensibleconduct.

C6.4 Afineisasanctionwhichcanbeastandalonesanctionorcanbemadeinconjunctionwithallotheravailableandappropriatesanctions,includingExclusion,havingregardtothenatureandcircumstancesofeachcase.

The member’s means

C6.5 Themeansofthemembershouldbearelevantconsiderationincalculatingtheappropriateleveloffine(seeD’Souza v The Law Society)10.

C6.6 Beforefixingtheamountoffine,theCommitteeshouldinvitethemembertoaddresstheCommitteeonthismatter.Whetheramemberwishestodosoornotisamatterforhim/her,butintheabsenceofevidencetheCommitteeisentitledtoassumethatthemember’smeansdonotjustifyareductionintheamountoffinethatwouldbeotherwiseimposedforanoffenceofthegravityinquestion.

C6.7 In Solicitors Regulation Authority v Davis and McGlinchey11,inajudgmentwhichaddressedtheissueofcostsorders,theCourtheldthatoncetheallegationshadbeenadmittedorhadbeenfoundproved(butnotbefore),itwasincumbentuponthemembertoindicatewhetherhewillbecontendingthatnofinancialorderagainsthimshouldbemade,orshouldbelimitedinamount,byreasonofhislackofmeans,andtosupplytheevidenceuponwhichhereliestosupportthatcontention.

C6.8 Itshouldbenotedthattheamountofafineshouldnotbesopunitiveastocharacterisetheproceedingsas‘criminal’ratherthanadeterminationofcivilrightsandobligations.

10 2009] EWHC 2193 (Admin)

11 [2011] EWHC 232 (Admin)


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C7 CompensationC7.1 Thepurposeofanorderforcompensationistoreflectanyinconveniencesufferedbythe

complainantasaresultofthemembers’orfirms’failuretoobserveproperstandards. Themaximumsumpayableis£1,000.

C7.2 Disciplinaryproceedingsarenotdesignedtocompensatethosewhomayhavesufferedfinanciallossordamageasaresultoftheactsoromissionsofanindividual,nortopunishtheindividual,buttocompeltheobservanceofprescribedprofessionalconductasenunciatedinRidehalqh v Horsefield12.Accordingly,complainantsshouldpursuefinancialclaimsnotthroughACCA’sdisciplinaryprocessbutthroughtheappropriatelegalchannels.

C7.3 TheCommitteeshouldexercisecaretoensurethatanorderforcompensationisnotmadeinrelationtoamountsalreadyclaimedthroughotherchannelssuchastheCourts.

C7.4 Again,themeansofthememberarearelevantconsiderationincalculatingtheamountofcompensationtobeawarded.AlthoughpaymentofcompensationisnormallyroutedthroughACCA,ACCAwillnotmakeanypaymenttothecomplainantunlessithasfirstbeenputinfundsbythemember.

C8 Waiver of feesC8.1 TheCommitteemayorderthememberorfirmtowaiveorreducetheirfeestothecomplainant

whereappropriate.

C8.2 Similarconsiderationsapplyinrelationtoamountsalreadyclaimedthroughotherchannelsandthemeansofthemember.

C9 Specified period not to be reckoned as part of approved accountancy experience

C9.1 Inordertobecomeamember,acertainnumberofyearsofapprovedaccountancyexperiencemustbeobtained.TheCommitteehasthepowertoorderthatanypartofanaffiliate’sorstudent’sexperiencegainedshouldnotcounttowardssuchapprovedaccountancyexperience.

C10 Ineligible for membership for a specified periodC10.1 TheCommitteemayorderthatanaffiliateisnotgrantedmembershipstatusforaspecified

period,notwithstandingthathemaybeeligibleformembership.ThiscouldbeorderedinadditiontoorinsteadofanorderunderComplaintsandDisciplinaryRegulation13(9)thatanyfutureapplicationformembershipbereferredtotheAdmissionsandLicensingCommittee.

C11 Ineligible to sit ACCA examinations for a specified periodC11.1 TheCommitteemayorderthatastudentisnoteligibletositanyexamination,orpartoran

examination,foraspecifiedperiod.Thissanctionmightbesuitablewhere,forexample,thestudenthasnotbeenremovedfromtheregisterbuttheCommitteeisoftheviewthatthestudentshouldnotbepermittedtositexaminationsforaperiodoftime.

12 [1994] 3 ALL ER 848


17

C12 Disqualification from one or more examinationsC12.1 Thissanctionisonlyavailableifthestudenthasnotalreadybeengiventheexaminationresult.

Itcanbeusedinconjunctionwithanorderthatthestudentberemovedfromtheregister,sothatifheweretoapplyforreinstatementinfuturehewouldhavetore¬sittheexamination(s) inquestion.

C13 Orders relating to certificates, licences and future applications for membership

C13.1 OtherthanasanautomaticresultofanorderforExclusion1,theCommitteehasnopowertoorderremovalofamember’scertificateorlicence.

C13.2 However,theremaybecaseswheretheCommitteefeelsthatExclusionfrommembershipisnotwarranted(or,inthecaseofafirmornon-member,isnotavailable),butthatfortheprotectionofthepublicandthereputationoftheprofessionthememberoughttobepreventedfromcarryingoutcertainactivities.Insuchacase,theCommitteeshoulduseitspowerstoreferthemattersofconcerntotheAdmissionsandLicensingCommitteeforconsiderationand,ifnecessary,suspendorplaceconditionsonthecertificateorlicenceintheinterim.ThesepowersaresetoutinComplaintsandDisciplinaryRegulation13(8)(a)anddescribedfurtherinSection D.

SECTION D

Referrals to admissions and licensing committeeD0.1 ThepowertoorderthatcertainmattersbereferredtotheAdmissionsandLicensing

CommitteeissetoutinComplaintsandDisciplinaryRegulation13(8)(a).Inrelationtoanydisciplinedindividualorfirm,theCommitteehasthepowertomake‘anyoftheorderssetoutinRegulation13(8)(b)whereapplicable’(seeComplaintsandDisciplinaryRegulations13(1)(a) to13(8)(c)).

D0.2 AsthisgivestheCommitteeawidediscretion,beforemakinganorderunderthisregulation,theCommitteeshouldsatisfyitselfthatitwouldhavetheintendedeffect.TheCommitteeshouldinviterepresentationsfromthepartiesastotheworkability,effectandanyunintendedconsequencesoftheproposedorder.

D1 Member’s fitness and propriety to hold a certificate or licence or to conduct ERA be referred to the Admissions and Licensing Committee

D1.1 Thisorderissuitablewherethememberholdsacurrentcertificate.TheCommittee’sordershouldstatebywhichdatetheAdmissionsandLicensingCommitteeshouldreceivethereferral,whichmustbenolaterthantwelvemonthsfromtheeffectivedateoftheorder.

D1.2 TheCommittee’swrittenreasonsforthedecisionshouldmakeitclearwhatarethespecificissuesofconcernitwishestheAdmissionsandLicensingCommitteetotakeintoaccount.

13 Any certificate or licence held by the member is automatically removed when membership ceases


18

D1.3 WheretheCommitteeisconcernedthatthepublicmaybeatriskinthemeantime,itmaycombinethisorderwithanordertosuspendorplaceconditionsonthecertificateinquestion.TheCommitteeshouldnotsuspendacertificateunlessitissatisfiedthatthepublicwouldnotbeadequatelyprotectedbyplacingconditionsonthecertificate.

D1.4 Theimpositionofconditionsallowsthepractitionertocontinuetoholdthecertificatewithcertainrestrictions,enablinghimtoremedyanydeficienciesinhispracticewhilstatthesametimeprotectingclients.Anexamplemaybeaprohibitiononholdingclientmonies.Anyconditionsimposedshouldmeetallofthefollowingcriteria:

a. Appropriate;

b. Proportionate;

c. Workable;

d. Measurable.

D2 Any future application for a certificate or licence or to conduct ERA be referred to the Admissions and Licensing Committee

D2.1 AnexampleofasituationwheresuchanordermaybeappropriateiswhereamemberhasvoluntarilyrelinquishedhiscertificateorlicencesincethedisciplinaryproceedingscommencedandtheCommitteewishesanyfutureapplicationtobeconsideredbytheAdmissionsandLicensingCommitteesothatitcansatisfyitselfastotheapplicant’sfitnessandproprietytoholdthecertificate.Absentsuchanorder,whereanapplicantforacertificatemeetsalltheeligibilityrequirements,theapplicationisnormallyhandledadministratively.

D2.2 Suchanordercouldbemadeagainstacurrentorformerstudentoraffiliateaswellasagainstcurrentandformermembersandfirmsandnon-members.

D2.3 Dependingonthespecificcircumstancesofthecase,suchanordermayalsobeappropriate incombinationwithanorderthatanyfutureapplicationformembershipbeconsideredby theAdmissionsandLicensingCommittee(seeD3below).

D3 Any future application for membership by an affiliate or student be referred to the Admissions and Licensing Committee

D3.1 Whereanaffiliateorstudentisnotbeingremovedfromtheregisterasaresultofthedisciplinaryhearing,theCommitteemayneverthelessdecidethattheAdmissionsandLicensingCommitteeshouldsatisfyitselfastotheindividual’sgeneralcharacterandsuitabilityformembershipwhen/ifinduecourseanapplicationformembershipismade.

D3.2 Whereanaffiliateisconcerned,thiscouldbeorderedinadditiontoorinsteadofanorderunderComplaintsandDisciplinaryRegulation13(4)(c)thattheaffiliatebedeclaredineligible formembershipforaspecifiedperiod.


19

SECTION E

Other issues relevant to sanction

E1 Convictions and sanctions imposed by another professional bodyE1.1 Itisnotthepurposeofsanctiontopunishamemberforthesecondtimeinrelationtoa

convictionorsanctionimposedbyanotherprofessionalbody.

E1.2 TheCommitteeshouldbearinmindthatthesentenceimposedinacriminalcontextisnotnecessarilyareliableordefinitiveguidetotheseriousnessoftheoffence.Theremayhavebeenparticularmitigationwhichledthecourttoitsdecisiononsentence,whichcarrieslessweightinadisciplinarycontextbecauseofthedifferentpublicintereststhatapply.

E1.3 InR(on the application of Low) v General Osteopathic Council14,MrJusticeSullivanreferringtothestatementofSirThomasBinghamMRinBolton v Law Society15that“thereputationoftheprofessionismoreimportantthanthefortunesofanyindividualmember.Membershipof aprofessionbringsmanybenefits,butthatispartoftheprice”said:

“…because of these considerations, the seriousness of the criminal offence, as measured by the sentence imposed by the Crown Court, is not necessarily a reliable guide to its gravity in terms of maintaining public confidence in the profession”.

E1.4 Similarly,theCommitteeisnotfetteredbythesanctionimposedbyanotherprofessional bodyandisfreetoimposewhateversanctionitdeemstobeappropriate.

E1.5 In Council for Healthcare Regulatory Excellence v (1) General Dental Council and (2) Fleishmann16,MrJusticeNewmanoutlinedthefollowingprinciple:

“As a general principle, where a practitioner has been convicted of a serious criminal offence or offences he should not be permitted to resume his practice until he has satisfactorily completed his sentence. Only circumstances which plainly justify a different course should permit otherwise. Such circumstances could arise in connection with a period of disqualification from driving or time allowed by the court for the payment of a fine. The rationale for this principle is not that it can serve to punish the practitioner whilst serving his sentence, but that good standing in the profession must be earned if the reputation of the profession is to be maintained”.

14 R (on the application of Low) v General Osteopathic Council [2007] EWHC 2839 (Admin)

15 Bolton v Law Society [1994] 1 WLR 512

16 Council for Healthcare Regulatory Excellence v (1) General Dental Council and (2) Fleishmann [2005] EWCH 87 (Admin)

17 [2000] UKPC 15


20

E2 DishonestyE2.1 Dishonesty,evenwhenitdoesnotresultindirectharmand/orloss,orisrelatedtomatters

outsidetheprofessionalsphereunderminestrustandconfidenceintheprofession.TheCommitteeshouldconsiderallpossiblesanctionsand/orcombinationsofsanctionsavailabletoitineverycase,neverthelessthecourtshavesupportedtheapproachtoexcludemembersfromtheirprofessionswheretherehasbeenalackofprobityandhonesty:

“...there is no room for a dishonest doctor”; Singh v General Medical Council17;

“For all professionals, a finding of dishonesty lies at the top of the spectrum of misconduct”; Tait v Royal College of Veterinary Surgeons18;

“…in the absence of remarkably good reasons in mitigation it should lead to erasure”; The Fifth Shipman Inquiry19.

E2.2 Thepublicisentitledtoexpectahighdegreeofprobityfromaprofessionalwhohasundertakentoabidebyacodeofethics.ThereputationofACCAandtheaccountancyprofessionisbuiltuponthepublicbeingabletorelyonamembertodotherightthingindifficultcircumstances.Itisacornerstoneofthepublicvaluewhichanaccountantbrings.

E2.3 TheCommitteeshouldbearthesefactorsinmindwhenconsideringwhetheranymitigationpresentedbythememberissoremarkableorexceptionalthatitwarrantsanythingotherthanexclusionfrommembershiporremovalfromthestudentregister.

E3 Seriousness of allegationE3.1 TheCommitteeshouldreachaviewontheseriousnessoftheconductwhichhasbeenfound

provedbeforegoingontoconsidersanction.Itisimportantnottoconflatethosetwostagesofthedecision-makingprocess.

E3.2 SectionFsetsoutthefactorswhicharerelevanttotheseriousnessoftheallegationinspecificcasetypes.

E3.3 TheCommitteeshouldassesstheseriousnessoftheallegationinlightofthepotentialworstcasescenario(i.e.riskofharm)ratherthanwhetheranyactualharmhasresulted.

E4 Interim ordersE4.1 Inmakingthedecisiononsanction,theCommitteeshouldnotgiveweighttowhetherornot

aninterimorderhasbeenimposeduponthememberpendingtheoutcomeofthedisciplinaryproceedings,northelengthoftimeanyinterimorderhasbeeninplace.Wheninterimordersareimposed,nofindingsoffactaremadeinrelationtoanyallegationsandthetestforwhetheraninterimorderisappropriateisverydifferentfromtheconsiderationstheCommitteeneedstobearinmindwhendecidingsanction.

17 [2000] UKPC 15

18 [2003] UKPC 34

19 The Fifth Shipman Inquiry Sir Donald Irvine, 2004


21

Section F

Factors relevant to seriousness in specific case types

Case type Very serious Serious Agravating factorsMitigating factors

PROFESSIONAL COMPETENCEAND DUE CARE

•Defectiveaccountancywork(e.g.poorquality,latefiling,notinstatutoryformat,notcomplyingwithrules/requirementsofclient’sregulatorsuchasSolicitors’AccountsRules;

•Pooradvice/delayinadvisinginrelationtoclient’saffairs/neglectofclient’saffairs;

•Failingtoexerciseadequatecontrolandsupervisionoverapractice;

•Failingtorespondexpeditiouslyoradequatelyoratalltoprofessionalcorrespondence.

•Natureofinefficientorincompetentwork.

•Attempttocoveruperrors;

•Financiallosstoclientorthirdparty

•Periodoftimeandnumberofsetsofaccounts;

•Deliberate/Reckless;

•Sizeofloss/errorinvolved.

•Noloss;

•Clientpromptlyrecompensedforanyloss;

•Hadtakenprofessionaladvice;

•Clientunhelpfulinprovidingaccounts;orgaveinsufficientormisleadinginformation;

•Evidenceoflack ofco-operation byclient.

INVESTMENTBUSINESS

•Carryingoninvestmentbusinesswithoutauthorisation;

•Carryingoninvestmentbusinessoutsidethefirm’sauthorisationcategory;

•Seriouslynegligent/recklessinvestmentadvice;

•Breachofinvestmentbusinessregulations.

•Numberofclients/numberoftransactionsconducted;

•Failuretomakeclientsawareofrisks;

•Lackofdocumentation onadvice;

•Highvaluecommissionearned;

•Breachisacriminaloffence.

•Improvedofficeprocedureimmediately;

•Stepstakenonbehalfofclienttorecoverloss;

•Levelofseriousnessofbreach.

CONDUCT AS ACOMPANYDIRECTOR

•Disqualificationasacompanydirector.

•Lengthofdisqualification.

•Lengthofdisqualification.


22

Case type Very serious Serious Agravating factorsMitigating factors

OTHERLIABILITIES AND BREACHESOFBYE-LAWSORREGULATIONS

•FailuretocomplywithanAdmissionsandLicensingCommitteeorderoranundertakinggiventoACCA;

•Failuretoco-operatewithadisciplinaryinvestigation;

•Failuretoco-operatewithACCA’smonitoringprocess;

•Bankruptcy.

•Beingsubjecttoaninsolvencyprocessotherthanbankruptcy;

•Failuretosatisfyajudgmentdebtwithoutreasonableexcuseforaperiodof2months;

•FailuretoinformACCAofrelevantmattersindicatingthatmemberhimselfmaybeliabletodisciplinaryaction(e.g.non-disclosureofcriminalconviction);

•FailuretocomplywithCPDrequirements;

•Failingtoprovideprofessionalclearanceortransferinformation.

•Periodoftimeinvolved;

•Deliberate/recklessdisregardoforder/regulations.

•Stepsswiftlytakentorectifybreach.

DISCIPLINED BY ANOTHER PROFESSIONAL BODY

•TheCommitteeshouldtakeintoaccountthesanctionimposedbytheotherbody,althoughitisnot constrained to followit.

•Anymatterswhichmayhavearisensincethedisciplinaryactiontakenbytheotherbody.

•Anymatterswhichmayhavearisensincethedisciplinaryactiontakenbytheotherbody.

ETHICALCONDUCT

•Deceiving/misleadingACCA/statutoryregulator;

•Failingtoactwithintegrity;

•Lackofobjectivity/independence;

•Conflictofinterest;

• Breach of confidentiality.

•Unprofessionalbehavior(alackofcourtesyandconsideration).

•Deliberate/reckless;

•Positionoftrustheld;

•Sizeoflossand/orerrorinvolved.

•Informationprovidedcarelessly /accidentally


23

Section G

Table of sanctions available

SanctionM

emb

er

Form

er Mem

ber

No

n-Mem

ber

undertaken to

be b

ound

Firm

Form

er Firm

Reg

istered Stud

ent

Form

er Reg

istered

Student

Affiliate

Form

er Affiliate

1.Nofurtheraction

2.Admonished

3.Reprimanded

4.Severelyreprimanded

5.Excluded/removedfromregister(whichmaybecombinedwithanorderthatnoapplicationforreadmissionbeconsidereduntiltheexpiryofaspecifiedperiodofnolongerthanfiveyears)

6.Finenotexceeding£50,000

7.Compensationtobepaidbymembertocomplainantnot exceeding£1,000

8.Waiveorreduceanyfeeschargedtocomplainantwhichrelatedirectly totheprovenallegation

9.Aspecifiedperiodnottobereckonedaspartoftheindividual’s approvedaccountancyexperience

10.Declaredineligibletobeadmittedtomembershipforaspecifiedperiod

11.Declaredineligibletositexamination(s)foraspecifiedperiod

12.Disqualifiedfromspecifiedexamination(s)orpartsofexamination(s)whichthestudenthassat,theresultsofwhichhavenotbeennotified tothestudentatthedateoftheCommittee’sorder

13.Fitnessandproprietytoholdacertificate/licenceoreligibilitytoconductERAbereferredtoAdmissionsandLicensingCommitteebyaspecifieddatetobenolaterthan12monthsfromthedateoftheorderwhichmaybecombinedwithanorderthat:

•acertificateorlicenceoreligibilitytoconductERAbesuspendeduntilanorderoftheAdmissionsandLicensingCommitteehasbeenmade.

or:

•conditionsbeplaceduponacertificateorlicenceoreligibilitytoconductERAuntilanorderoftheAdmissionsandLicensingCommitteehasbeenmade.

14.AnyfutureapplicationforacertificateorlicenceortoconductERA tobereferredtotheAdmissionsandLicensingCommittee

15.AnyfutureapplicationformembershipbereferredtotheAdmissionsandLicensingCommittee


24

SECTION H:

Part 1 – Insolvency common sanctions guidanceBackground

Therearefiverecognisedprofessionalbodies(RPBs)thatlicenseinsolvencypractitioners.OnceanRPBhasinvestigatedtheconductofanyinsolvencypractitioneritlicenses,itcan(underitsowndisciplinaryprocesses)imposesanctionsonthatlicenceholder.SuchsanctionscanfollowaninvestigationofacomplaintorasaresultofafindingonamonitoringvisitcarriedoutbytheRPBorfollowingthereceiptofanyotherintelligence.

Theregulatoryobjectivesintroducedin2015providetheRPBswithaclearer,enhancedstructurewithinwhichtocarryouttheirfunctionsofauthorisingandregulatinginsolvencypractitioners.

ARPBwill,whendischargingregulatoryfunctions,berequiredtoactinawaywhichiscompatiblewiththeregulatoryobjectives.

TheCommonSanctionsGuidanceaimstoensureconsistencywiththeregulatoryobjectivessothatitenablesRPBstohaveasysteminplacewhichsecuresfairtreatmentforpeopleaffectedbytheactsofinsolvencypractitioners,istransparent,accountable,proportionate,andensuresconsistentoutcomes.

Thecircumstancesthatleadtoacomplaintandtheissuesthatariseaspartofthecomplaintwillvary,possiblysignificantly,onacase-by-casebasis.Notallcomplaintsaboutaninsolvencypractitionerleadtothembeingdisciplined.Forexample,errorsofjudgementandinnocentmistakesarenotgenerallyconsideredtobemisconduct.If,however,aninsolvencypractitionerhasmadeaseriouserrororarepeatednumberoflessseriouserrors,thismaymeantheyhaveperformedtheirworkinefficientlyorincompetentlytosuchanextentoronsuchanumberofoccasionsastohavebroughtdiscredittothemselves,theirregulator,ortheinsolvencyprofession.

TheCommonSanctionsGuidanceisnotintendedtobeatariffanddoesnotbindeachRPB’sprocessestoafixedsanctionsregime.Althoughitgivesanindicationofthelevelofsanctiontobeimposed,eachDisciplinaryCommitteeortribunalwilluseitsownjudgementtosetasanctionappropriatetothecircumstancesoftheindividualcase.

WhenaDisciplinaryCommitteeortribunalconsiderswhatwouldbeanappropriatesanction,itwillrefertothisguidanceandmay,withinitsdiscretion,varythesanctiondependingonaggravatingandmitigatingfactors.WhereadecisionvariesfromtheguidancethereasonsforthisshouldbeclearlydocumentedandexplainedbytheRPB.

Sanctions

WhenadisciplinaryCommitteeortribunalconsiders:

• whethertoimposeasanction;and

• whatsanctiontoimpose.


25

TheCommitteeshouldconsiderthefollowingfactors:

• protectingandpromotingthepublicinterest;

• maintainingthereputationoftheprofession;

• upholdingtheproperstandardsofconductintheprofession;and

• correctinganddeterringbreachesofthosestandards.

WhenaDisciplinaryCommitteeortribunaldecidesthatacomplainthasbeenprovedorwhereitisadmitted,theCommitteeortribunalwilldecidetheappropriatesanction.Indoingso,theCommitteeortribunalwillformitsviewbasedontheparticularfactsofthecase.IftheCommitteeortribunaldecidesapenalty(forexample,exclusion,reprimandorafine)isnecessaryitwillidentifytherelevantcategoryofcomplaintandtherelevantbehaviour.

TherearetwotypesofsanctionavailabletotheDisciplinaryCommitteeortribunal:non-financialsanctionsandfinancialsanctions.Theindicativesanctions(anindicationofthesanctionaninsolvencypractitionermightbegivenforaparticulartypeofwrongdoing)aresetoutinthetableinPart2.TheactualsanctionwillbedeterminedtheRPB’sownrulesandregulationsandhavingregardtoanyaggravatingandmitigatingfactors(seebelow).

Non-financial sanctions

Thesecanrangefromareprimand;severereprimand;suspensionofalicenceormembership;withdrawalofalicence;toexclusionfrommembership,assetoutintheRPB’sbyelaws.

TheDisciplinaryCommitteeortribunalcanusenon-financialsanctionstoindicatetotheinsolvencypractitionerthattheirconductfallsshortofthestandardsrequired.Anon-financialdisciplinarysanctionwillformpartofthatinsolvencypractitioner’sdisciplinaryrecord.Insomecircumstances,anon-financialsanction(suchasexclusionfrommembershiporremovaloftheinsolvencypractitioner’slicence)willaffectanindividual’sabilitytopractiseasaninsolvencypractitioner.

Financial sanctions

Foreachtypeofcomplaintthereisasuggestedstartingpointforafinancialsanction.Thisisnotatariffora“goingrate”forthecomplaintbutitsimplyindicateswheretheCommitteeortribunalmightstartwhenitlooksatalltherelevantfactorsrelevanttodecidingthepenalty.OncetheCommitteeortribunalhasagreedthemostappropriatestartingpoint,ittakesintoaccountanyaggravatingandmitigatingfactorsbeforedecidingwhetheritisappropriatetoreduceorincreasethepenalty.TheCommitteeortribunalmaydecideonamoreorlessseverepenaltythanthestartingpointdependingonallthecircumstancesofthecase.

Aggravating and mitigating factors

Theindicativesanctionmayneedtobeadjusteddependingonthefactsofparticularcases.

ADisciplinaryCommitteeortribunalwillnormallyconsidertheaggravatingandmitigatingfactorssummarisedbelowbeforeitdecidesontheappropriatelevelofsanction.Thelistisnotexhaustiveandnotallthefactorswillapplytoaparticularcase.

OncetheDisciplinaryCommitteeortribunalhasidentifiedthefactorsitconsidersrelevant,itshoulddecidewhatweighttogivetoeachofthem.


26

Costs

DisciplinaryCommitteesandtribunalshavethepowertoordertheinsolvencypractitionertopaythecostsincurredduringaninvestigationintoacomplaint.Ordersforcostsmayreflectthecostsreasonablyincurredininvestigatingthecomplaintandarenotimposedasasanction.ADisciplinaryCommitteeortribunalwillonlyconsiderthe‘costs’elementafterithasdecidedtheappropriatesanctionforthecomplaint.

Publicity

WhenadisciplinaryCommitteeortribunalmakesanadversefindingandorder,theRPBwillpublishtherecordofdecisioninthemanneritthinksfit.TheinsolvencypractitionershouldbenamedinthatpublicityunlessaDisciplinaryCommitteeortribunalordersnopublicityorpublicityonananonymousbasis,inwhichcasereasonsfornotdoingsowillbeprovidedbytheDisciplinaryCommitteeortribunalswillrarelyorderthatthereshouldbenopublicityassociatedwithanadversefinding.

From1November2014,allpublisheddisciplinarysanctionsareincludedontheInsolvencyService’swebsiteinanagreedformat.Thepublicationincludesdetailsoftheinsolvencypractitioner,thenatureofthecomplaint,thefindingandanysanctiontogetherwithreasonsforthedecisionincludingaggravatingandmitigatingfactorsconsideredaspartofthatdecision.

https://www.gov.uk/government/publications/disciplinary-sanctions-against-insolvency-practitioners

https://www.gov.uk/government/publications/disciplinary-sanctions-against-insolvency-practitioners


27

Part 2 – Indicative sanctions for various breaches of the Insolvency Act 1986, other relevant legislation and Statements of Insolvency Practice

Thetablebelowgivesanindicationofthelevelofsanctionwhichmaybeimposedbutshouldnotberegardedasatariff.Eachdisciplinarycommitteeortribunalwilluseitsownjudgementtosetasanctionappropriatetothecircumstanceoftheindividualcase,dependingontheseriousnessofthebreachandtheaggravatingandmitigatingfactors.

Eachsanctionissplitintothreecategoriesdependingontheseriousnessofthemisconduct:

• Very serious (a):Thiswillgenerallymeanthattheinsolvencypractitioner’sconductwasdeliberateand/ordishonest.

• Serious (b):Thiswillgenerallymeanthattheinsolvencypractitioner’sconductwasreckless.

• Less Serious (c):Thiswillgenerallymeantheconductbytheinsolvencypractitioneramountstoaninadvertentbreach.Wherebreachesareadjudgedtobeinadvertent,afinancialorpublishedsanctionmaynotalwaysbeappropriatedependingonthefacts ofthecaseandtheaggravatingandmitigatingfactorsconsidered.

Wheretheconducthasresultedinalikelyprofittotheinsolvencypractitionerortheirfirmoranyotherconnectedparty,thedisciplinary/investigationcommitteeortribunalmayissueafineequivalenttothelikelyprofitgained.Thestartingpointfordeterminingthelikelyprofitwillbe30%ofthetotalfeeschargedbytheinsolvencypractitionerortheirfirmoranyotherconnectedpartyfortheengagementinquestion.Afineofthisnaturewillonlybeadjusted(downwards)ifthefirmcanproducecogentandreliableevidencethatthefinancialbenefit(profit)gainedislessthanthefineproposed.

Whereadisciplinary/investigationcommitteeortribunalproposestoissueafineforabreachthathasledtoaprofitfortheinsolvencypractitionerortheirfirmoranyotherconnectedparty,thedisciplinary/investigationcommitteeortribunalwillissueasinglefinancialsanctionwhichwillincludeboththefinefortheestimatedprofitgainedexplainedaboveaswellasavariablefinelistedinPart3belowwhichwilldependonseriousnessofthemisconduct,thefactsofthecaseandbetieredalongsidetheappropriatenon-financialsanction.

Whenconsideringallegationsrelatingtounauthorisedorexcessremuneration,disciplinarycommitteesortribunalswillinthefirstinstancehaveregardtowhethertheunauthorisedorexcessremunerationhasbeenrepaidtotheestatebeforedecidingonanappropriate financialsanction.


28

Allegation Non-financial sanctionStarting point for financial sanction

1 Actsofdishonestyresultingincriminalconvictionsand/oradversefindingsbyregulatoryandotherbodies

Exclusionandlicencewithdrawal

Afinancialsanctionmaynotbeappropriateineverycase.Whereafineisconsideredappropriate,thestartingpointshouldbe£15,000

2 Misappropriationoffundsintoownaccount,otherestatesorthirdparties

a)Exclusionandlicencewithdrawal

a)Fineof£20,000

3 Actingasaninsolvencypractitionerwithoutalicence

a)Exclusion

b)Severereprimand

c)Reprimand

a)Fineof£10,000

b)Fineof£5,000

d)Fineof£1,500

4 Drawingunauthorisedremuneration

a)Severereprimand

b)Severereprimand

c)Reprimand

a)Fineequivalenttotheleveloftheunauthorisedfeedrawn,or£10,000, whicheverisgreater

b)Fineof£5,000

c)Fineof£2,000

5 Drawingofexcessremunerationthathasbeendeemedunfairorunreasonable

a)Severereprimand

b)Severereprimand

c)Reprimand

a)Fineof£7,500

b)Fineof£5,000

c)Fineof£1,500

6 Failuretosubmitreturns(e.g.,CDDAreturns)oradelayinsubmittingreturnswherethedelayislikelytoimpactontheconductoftheinsolvencyappointment

a)Severereprimand

b)Reprimand

c)Reprimand

a)Fineof£5,000

b)Fineof£2,000

d)Fineof£1000

7 Failuretoconveneacreditor’smeetingoradelayinconveningacreditor’smeetingwherethedelayislikelytoimpactontheconductoftheinsolvencyappointment

a)Severereprimand

b)Reprimand

c)Reprimand

a)Fineof£5,000

b)Fineof£2,000

c)Fineof£1,000

8 Acceptedanappointmentasadministratorwhennostatutorypurposeachievable

a)Severereprimand

b)Reprimand

a)Fineof£7,500

b)Fineof£2,000

9 FailuretocomplywiththeprinciplesofaSIP,theInsolvencyActandrulesandregulationsthereunder

a)Severereprimand

b)Severereprimand

c)Reprimand

a)Fineof£7,500

b)Fineof£5,000

c)Fineof£1,500


29


10 Failuretotakeadequatestepstorealiseassets

a)Severereprimand

b)Reprimand

c)Reprimand

a)Fineof£7,500

b)Fineof£2,000

c)Fineof£1,500

11 Delayinprogressingadministrationofan insolvencyestate

a)Severereprimand

b)Reprimand

c)Reprimand

a)Fineof£5,000

b)Fineof£2,000

d)Fineof£1,500

12 Failuretorespondatall,oradelayinrespondingtoletters,telephonecallsoremails

a)Severereprimand

b)Reprimand

c)Reprimand

a)Fineof£2,500

b)Fineof£1,500

c)Fineof£500

Part 3 – Indicative sanctions for various breaches of the Insolvency Code of Ethics


1 Failuretocomplywiththefundamentalprincipleofintegrity

a)Exclusionandconsiderationoflicencewithdrawal

b)Severereprimand

a)Fineof£10,000

b)Fineof£5,000

2 Failuretocomplywiththefundamentalprincipleofobjectivity

a) Exclusion

b)Severereprimand

c)Reprimand

a)Fineof£10,000

b)Fineof£5,000

c)Fineof£2,000

3 Failuretocomplywiththefundamentalprincipleofprofessionalcompetence andduecare

a)Exclusion

b)Severereprimand

c)Reprimand

a)Fineof£7,500

b)Fineof£5,000

c)Fineof£2,000

4 Failuretocomplywiththefundamentalprincipleofconfidentiality

a)Exclusion

b)Severereprimand

c)Reprimand

a)Fineof£5,000

b)Fineof£3,000

c) Fineof£1,500

5 Failuretocomplywiththefundamentalprincipleofprofessionalbehaviour

a)Exclusion

b)Severereprimand

c)Reprimand

a)Fineof£5,000

b)Fineof£3,000

c)Fineof£1,500


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Aggravating factors1. Concealmentofwrongdoing

2. Lackofcooperationwithregulator

3. Repeatedcourseofconduct

4. Re-occurrenceofconductpreviouslysubjectofreminder,warningorothersanction

5. Theconducthascausedorislikelytocausethelossofsignificantsumsofmoney totheinsolvencyestateand/oranythirdparty

6. Poordisciplinaryorregulatoryhistory

7. Lackofunderstandingoracceptanceofcharge

Mitigating factors1. Self-reporting,acceptanceofconductissuesandpromptvoluntaryandimmediate

rectification

2. Self-reportingandpromptvoluntaryandimmediaterepaymentof(unauthorised)fees

3. Personalmitigation:financialcircumstances(whenconsideringthefinancialpartofthesanctiononly)Wheretheinsolvencypractitionerhasdifficultiesinrepayingafinancialsanction,considerationshouldbegiventoofferingpaymentininstalments

4. Personalmitigation;illhealth

5. Ageofissuesunderconsiderationinrespectoflessseriousmatterswheretherearenoaggravatingbehaviours

6. Generally,minimalriskofre-occurrenceorrepetitionwherenewprocedureshavebeenimplementedandverifiedbytheRPB

7. Absenceofanylossofmoniestotheinsolvencyestateand/oranythirdparties


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Flowchart of disciplinary process

DISCIPLINARY COMMITTEE OR TRIBUNAL DECISION

CASEMADEOUT NO CASE

TABLE OF DISCIPLINARY SANCTIONS

COMMITTEECONSIDERS APPROPRIATE CATEGORY

OF SERIOUSNESS

STARTING POINT FOR NON-FINANCIALSANCTIONAGREEDBYCOMMITTEE

STARTING POINT FOR FINANCIAL SANCTION AGREEDBYCOMMITTEE

CONSIDERATION OF AGGRAVATING AND MITIGATINGFACTORS

FINAL DECISION

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© ACCA January 2019.

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+44 (0)141 534 4199

www.accaglobal.com

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