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ICAEW member loses two disciplinary appeals

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An ICAEW member has had their two appeals dismissed after claiming that two tribunals’ decisions were flawed and that the costs were excessively harsh.

29th Apr 2022
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Adrian Duncan challenged the findings and costs of two disciplinary tribunal decisions, but in both appeal hearings, the appeal committee agreed with the original verdict. The combined costs and fines levied against Duncan, which were the subject of appeal, came to £38,333. 

Duncan raised similar points in both appeals published in April’s ICAEW disciplinary update, including facts missing from the judgment, excessive costs and questioning evidence. 

But in both cases, the appeal committee dismissed these quibbles and said the blame lay with the absent and unrepresented Duncan for not understanding the format of the judgments or providing a statement of means. 

Appeal 1: The case against the decision 

Duncan first tried to overturn a decision with fines totalling £10,000 and costs of £14,963. The disciplinary tribunal levied that financial penalty against Duncan, along with a severe reprimand, after hearing that he failed to:

  • co-operate with an ICAEW investigation
  • ensure that his company was registered with an AML supervisor
  • carry out customer due diligence around its AML practices and procedures.   

Duncan was not present at the hearing nor represented, but the grounds of his appeal included his assertion that the tribunal's decision as to sanction was conducted unfairly due to “a serious procedural irregularity” due to the panel taking on board views of an earlier appeal committee.

Duncan had appealed a separate decision in February 2021, however that appeal was not only dismissed by the ICAEW, but also had the member leaving the hearing with increased penalties and a raised reprimand.

The aggrieved ICAEW member also complained that the original sanctions were based on “a series of mistakes of fact” and paid insufficient regard to the “appalling delays in the conduct of the prosecution”.

Appeal 1: The appeal panel’s verdict

The appeal committee brushed off complaints of an “abuse of process” as unfounded. In a damning verdict for Duncan’s case, the report said: “What has been put forward in the Grounds of Appeal are, the appeal committee concluded, a simple repetition of the points that were considered and found to be unpersuasive by the disciplinary tribunal.” 

Duncan also railed against the “appalling delays in the conduct of the prosecution”. But the appeal committee responded, “Whilst Mr Duncan might wish that greater regard had been given to it the tribunal gave a reason why it didn’t give more weight to it namely that the cause of the delay ‘was not all due to the ICAEW’.”

In a common complaint for both appeals, Duncan complained that the disciplinary tribunal failed to record every detail. But the appeal panel responded, “The simple absence of mentioning a fact, within the tribunal’s reasoning, does not mean that the tribunal did not give due regard to it.”

Appeal 2: Second attempt at an appeal

He didn’t succeed in his other appeal heard on 21 January 2022 either. But this time in failing his appeal, he was also ordered to pay £5,000 towards the costs of the appeal.

Duncan disputed the disciplinary decision from January 2021, which found he had failed to send annual progress reports for three years to the registrars of companies within two months from the date of his appointment. 

For failing to comply with insolvency rules as the liquidator of a limited company, the disciplinary tribunal ordered a severe reprimand, a £7,500 fine and costs of £5,870.  

Again, Duncan contended that the disciplinary decision was flawed and that it had based its findings and orders on a “series of mistakes of fact”.  

Appeal 2: The appeal panel strikes again

Duncan's first assertion was that the disciplinary tribunal had overlooked his submissions as these had not been addressed in the decision. However, the appeal committee again responded that “not every fact mentioned or document examined must be recorded within the reasoning of a decision”. 

Duncan further criticised the original decision because it didn’t specify that there were no adverse consequences of his actions; however, the appeal panel pointed out that the disciplinary tribunal was entitled to conclude as it had that his failure over a protracted period to meet statutory filing deadlines reflected “detrimentally on the profession and the Institute”.

The ICAEW member also pulled up the disciplinary tribunal for it being informed of “prejudicial information” when it should not have been, namely that his insolvency licence prevented him from taking on new insolvency clients. But the appeal panel dismissed this as more of an issue with Duncan’s reading of the report as this information was recorded under the “background” heading rather than being recorded under the heading “matters relevant to sentencing”, where it did not appear. Further, the appeal committee was not persuaded that the information was prejudicial or irrelevant in any event. 

Another sticking point for Duncan was the fact the tribunal brought up that he should have put temporary staff in place to cover maternity leave when this wasn’t submitted by the investigating committee. But the appeal committee reminded Duncan that the disciplinary tribunal had taken into consideration Duncan's own evidence in which he sought to cast the blame on a senior manager for the late filing due to them being on maternity cover. 

Like the other appeal, Duncan deemed the costs excessively harsh. But the appeal panel placed the blame on Duncan for not providing a statement of means. “If no proof is provided, the investigation committee, disciplinary tribunal and the regulatory committees are entitled to assume that the respondent/respondent firm can meet any financial penalty and costs order that it includes as part of the sanction.”  

And with that, both appeals were dismissed. 

Inappropriate challenges

Alison Wood, an Associate from Blake Morgan said: “Many of Duncan's grounds of appeal demonstrated inappropriate challenges to well-established legal principles. Many professionals subjected to disciplinary proceedings are frustrated with delays, procedural matters and perceived unfairness. However, there are clear processes that must be followed in any investigation and while frustrating, it is rarely a good tactic to challenge these. 

“These cases emphasise the importance of ensuring appropriate legal representation at any hearing, engaging appropriately with the disciplinary process, and acknowledging the importance of insight and remorse. Duncan had left the country before the appeal hearings were heard and without his attendance or legal representation, the appeal committee did not have the benefit of further oral submissions when determining the appeal. Duncan paid the price for his ill-founded appeals, which resulted in further costs orders against him. However, these remain unpaid and will now be challenging to enforce, given he has now left the country. 

“Members are reminded that appeals are not without risk. Sanctions can be increased and further costs can be incurred so the importance of good legal advice and attendance at any hearing cannot be overstated.”

 

Blake Morgan’s accountancy regulatory team is available to assist with any disciplinary, regulatory and compliance matters arising in the accountancy profession – click here if you require any of their services.

Replies (13)

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By Hugo Fair
29th Apr 2022 16:35

Although the evidence suggests that Duncan's attitude & approach were myopic ... this hasn't prevented him from generating a 'no-lose' scenario when appealing.
If he'd won (however unlikely) he'd have been vindicated and presumably saved money ... but although he's lost (completely) he won't be paying the consequences, or indeed fines & costs, by the sound of it!
There's an increasing miasma of (let's be generous) inefficiency emanating from the PBs.

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By Brend201
29th Apr 2022 18:37

Looks like the people of South America (or Malta or Australia?) will now benefit from this man's talents. Clearly the creditors of his company will not benefit from anything. The receiver's report in December 2021 also states: "The Receivers determined that substantial sums were missing from the Company's bank account together with significant sums due to the various insolvency estates which should have been held in separate client accounts."

Looks like he will get another severe reprimand.

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By bobsto12
03rd May 2022 10:17

He's definately a determined refusnik.it seems he's even left the country to prove a point (ie hes not going to pay their fines or penalty).

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By johnpaylor
03rd May 2022 10:49

Isn't the matter of the appeal somewhat irrelevant in the light of the comment of Brend201?

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By indomitable
03rd May 2022 11:22

Can the author clarify something for me?

Members firms of the ICAEW are automatically registered as being supervised by the ICAEW as the AML supervisor.

Why do you say in your opening that the member

"failed to ensure that his company was registered with an AML supervisor"

Was he not a member with a practising certificate in which case supervision would be automatic?

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Replying to indomitable:
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By Ian McTernan CTA
03rd May 2022 14:03

As far as CIOT goes, we have a choice of CIOT or HMRC.

Both charge an additional fee (CIOT is £310) for this privilege...

It's a condition of membership that you are registered, but not automatic for CIOT.

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Replying to Ian McTernan CTA:
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By indomitable
03rd May 2022 14:23

Members of the ICAEW don't have a choice if you are practising, its automatic and part of the annual fees, that's why I was curious. But I think he is in insolvency and may not be a member firm

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By PJones77
03rd May 2022 15:35

When will accountants wake up and smell the coffee? The ICAEW and ACCA and all the other so called governing bodies make their money by fining their members- its a great revenue stream for them. How else are they going to pay for their big fat salaries? £38,000 for admin errors about AML procedures is scandalous. Was this man involved in fraud? Apparently not. Did he cause any damage to the tax system? Apparently not. He had the temerity to do the unthinkable and challenge an accountancy body that he pays his annual memberships as so they increased the fines. The ICAEW take the membership fees and then effectively closed his business down by issuing huge fines. No wonder the man has left the UK. I don't for a minute blame him. If they wanted to reprimand him give him a warning about his future conduct and that his practising certificate but - hey £38,000 is not a bad amount of money for the governing body to rake in is it !!

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Replying to PJones77:
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By Hugo Fair
03rd May 2022 15:48

Really?

Have a read of https://insolvencynewsonline.com.au/liquidator-who-fell-foul-in-oz-struc... if you "don't for a minute blame him"!

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Replying to Hugo Fair:
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By PJones77
03rd May 2022 16:14

Hugo Fair - You didn't read my comment very well. I didn't offer an opinion on whether or not I blame this accountant. I did offer an opinion on the level of the fine and the absolute rule of judgment by the accountancy body this former member paid his membership fees. £33,000 how do they justify this amount and then a further £5000 - wake up and smell the coffee. Fines are a great revenue stream for the ICAEW and the alphabet soup of other accounting bodies.

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Replying to PJones77:
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By Hugo Fair
03rd May 2022 17:13

I read it absolutely without difficulty and accurately.
I wasn't commenting on your diatribe (possibly justified) about Fines being a great revenue stream for the ICAEW ... just the sentence that I extracted/quoted.

As per the post above from Brend201:
"The receiver's report in December 2021 also states: "The Receivers determined that substantial sums were missing from the Company's bank account together with significant sums due to the various insolvency estates which should have been held in separate client accounts.""

So not a nice or honourable man for many years ... hence my questioning of your choice of words as a summary of your perspective on this unprofessional chancer.

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By carnmores
04th May 2022 11:24

AND yet again its followed by an op-ed from some insurer based adviser, there are fair points from Hugo and PJ , did the reports go on to say that the missing money was stolen?

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By Brend201
04th May 2022 17:40

PJones77 signed up for this site yesterday and his first comment is to complain about the ICAEW justice system.

"Was this man involved in fraud? Apparently not." Blames the ICAEW for high costs and says "No wonder the man has left the UK. I don't for a minute blame him."

In my opinion, the least that Mr Duncan could do would be to return to/remain in the UK and assist the Receivers with their investigations into the missing money. That's the real issue.

"PJones77"? Is that you Adrian Duncan?

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