Appeal panel reduces costs for convicted accountantby
An excluded chartered accountant, who stole almost £50,000 from an elderly relative, has successfully contested £4,350 costs ordered by the Disciplinary Committee after lockdown restrictions left her unable to pay.
Janet Ashby was ordered by a disciplinary committee in November 2019 to pay costs of £4,350 after she was convicted of theft. But in the year that followed, her personal circumstances deteriorated and the effect of the coronavirus restrictions meant she had become long-term unemployed.
Ashby did not have the means to pay the disciplinary bill and took her case to a virtual appeal hearing (as reported in April’s disciplinary orders). The Appeal Committee considered Ashby’s current circumstances and recognised that her costs should be reduced to £500.
The original crime
The ICAEW Disciplinary Committee excluded Ashby in November 2019 after she was sentenced to two and a half year’s imprisonment for theft and subject to confiscation proceedings.
According to the original disciplinary report, Ashby “persuaded” an elderly relative to take an equity release on his house in two parts, firstly for £37,500 and secondly for £27,000.
The former chartered accountant took advantage of the victim putting the money in a joint account and stole between £40,000 and £50,000. Ashby used the stolen money to help fund her daughter’s school fees, as well as her own mortgage arrears and presents for her children.
Ashby hid her misdeeds from her victim’s son, whom she knew was set to be the beneficiary under the victim’s will.
At the time of her conviction, Ashby expressed a great deal of remorse. She claimed the equity release was to be spent on converting her house so that the victim could go and live with her family rather than going into a care home, which he didn’t want to do.
But Judge Kearl described the offense as “mean and nasty” and stated that Ashby “exploited” the victim’s trust, as he put his financial affairs in her hands in the knowledge that she was an accountant and a close relative.
Following the Crown Court’s ruling, Ashby, being convicted of an indictable offence in a court of competent jurisdiction in the UK, for which she received an immediate custodial sentence, was therefore liable to disciplinary action.
There were no previous disciplinary matters recorded against Ashby; the Tribunal took into account that until her conviction she had been of good character.
However, the committee regarded this as a serious offense of dishonesty. They stated that her behaviour was fundamentally incompatible with continued membership of the Institute.
Ashby could not contest the complaint since she was convicted of a serious criminal offence. The Appeal Panel noted though that the Disciplinary Committee was “entirely right to make an order for costs”.
But after a year of coronavirus restrictions that left Ashby in financial ruin, the Appeal Committee recognised that the costs would actually prove to be irrecoverable and add greater cost to the Institute in trying to recover them.
Ashby’s personal situation had dramatically changed since the Disciplinary Committee’s ruling. The coronavirus restrictions left her with little prospects for a job, and on top of that, her assets, including her home, were liquidated.
Ashby, who had been a member of the ICAEW since 1990, was now bankrupt and her health had been gravely impaired.
The practicalities of the situation meant that Ashby was not realistically going to be able to repay the £4,350 costs, but the Appeal Panel still wanted to impose a nominal sum of £500 to recognise that the Disciplinary Committee had originally acted correctly.
The Disciplinary Committee ruled that the starting point for a custodial sentence, whether suspended or not, is exclusion. The Investigation Committee sought costs of £6,431.50. But even then, Ashby provided a statement of her financial circumstances, showing that she was in financial difficulty. The Tribunal settled on costs of £4,350, and ordered Ashby’s exclusion from the Institute.
Samantha Hatt, Legal Director at Blake Morgan LLP, comments:
The appeal in this case relates to the ability of Ashby to pay the costs order awarded against her following the outcome of the disciplinary proceedings. Ashby did not challenge quantum but was concerned only with enforcement as she did not have the means to pay.
The Appeal Committee (AC) determined that the Disciplinary Committee (DC) was not wrong in principle to award a costs order against Mrs Ashby in the sum of £4,350. But it went on to decide that the current circumstances meant enforcement of that order would be ineffective and costly for the Institute, and therefore the practical solution was to reduce the quantum to a nominal sum of £500. Importantly, in terms of enforcement, it also ordered that that these costs should not be enforced without the permission of the AC, on application by either party and only if there was a material change of circumstance.
The AC's decision in this appeal is intriguing. Whilst it upheld the DC's decision to award costs in principle, it is hard to follow why it chose to reduce the costs order to £500, when its decision on enforcement provided an effective remedy to the issue on appeal. Surely, the proportionate outcome for both Ashby and the Institute would have been to uphold the costs order in the sum of £4,350 alongside the AC's order on enforcement.
Ultimately, Ashby was convicted of a serious criminal offence, which carries significant implications for the accountancy profession. In carrying out its regulatory function to protect the public and uphold standards, the Institute was obliged to investigate the matter and bring it before the Disciplinary Committee with the costs that this entailed. Reducing the costs in those circumstances seems arbitrary and in contradiction with the AC's rationale on the merits of the costs order.
Samantha Hatt is a Legal Director at Blake Morgan and part of the Accountancy Defence team alongside colleagues Chris Cope and Matthew Corrie. Should accountants require advice or representation please feel free to get in touch here.