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Failure to provide information costs practitioner £5k

Failure to provide information costs practitioner £5k


A sole practitioner has been severely reprimanded and handed a £5,000 fine, plus ordered to pay costs of more than £8,000, after he failed to provide the ICAEW with requested documents.

16th Oct 2023
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Jeffrey Davidson, who up until this point had an unblemished career as a member of the Institute for 35 years, faced disciplinary action after he failed to comply with two formal letters referring to two complaints from ICAEW. 

The tribunal highlights the importance of providing information to your professional bodies if requested promptly and within the timeframe - otherwise, you could be in line for a hefty fine. 

He was first asked to provide documents and information relating to a complaint on 23 August 2021 but did not do so. Davidson was then asked to provide another set of documents and explanations on 18 November 2021, and while he did engage with the ICAEW on this occasion, he failed to send any of the requested information. 

Misconception, not defiance

When the issue was taken to the disciplinary tribunal, as documented in October’s disciplinary orders, Davidson first denied both complaints, but at the start of the hearing he switched from denials to unequivocal admissions of both complaints. 

During the hearing, Davidson claimed that his misconduct wasn’t fuelled by defiance, but instead was caused by “misconception”. He was under the impression that the laws of confidentiality and privilege prevented him from disclosing the information sought by the Institute. 

The London-based chartered accountant pointed to his correspondence with his solicitors, where in a letter dated 6 May 2022, there were references to his conflicting rights in law and his obligations to ICAEW. 

Davidson’s correspondence from his solicitors was used to highlight his initial confusion and misconception as the reason for not providing the information. 

The solicitor correspondence in May 2022 noted that after receiving “robust advice” Davidson fully understood his obligations as a member of ICAEW to provide the requested documents and that any legal privilege that might exist did not prevent him from complying with his obligations to his regulator.  

Initially, the tribunal accepted that for the first complaint, Davidson seemed to be under the misapprehension that he couldn’t respond because of his obligation as a valuer. However, he still didn’t produce the documents even after ICAEW explained the position.

Tribunal didn’t accept misconception

While the tribunal considered Davidson’s claim of ‘misconception, it concluded that this submission did not hold any weight as a mitigating factor for the second complaint after he emailed ICAEW in October 2021 saying that he was “in the middle of preparing a response which will be with you shortly”. 

As further proof, he also appointed a solicitor in December 2021 who wrote that they had been working with Davidson to collate the information requested and that the evidence still needed to be redacted to remove personal information. 

The solicitor also added that they were in the process of preparing responses to the requests for explanations but this is taking some time. They concluded that Davidson was  “keen that his response is as full and accurate”. 

The tribunal acknowledges that there had been some response on Davidson’s behalf, but the relevant information was still not forthcoming. So it decided that an appropriate punishment would be a severe reprimand and a financial penalty of £5,000. 

In addition to the sanctions, the tribunal also ruled that ICAEW was entitled to costs £8,125. 

Since the evidence and information were still outstanding, the tribunal also set another deadline for that, too. Davidson was given 28 days from the date of the order to provide that information initially requested in August 2021 and November 2021. 

Replies (14)

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Danny Kent
By Viciuno
16th Oct 2023 12:48

I'd be interested to see the breakdown of the "costs" incurred by the institute, as frankly £8k is madness.

Obviously not condoning his refusal to reply to the requests - but that is what the penalty is for.

After seeing figures banded around like this there is no wonder the Miss Watson working at PWC (or was it Renaldo?) is scared to report themselves to the institute.

Thanks (11)
By Geoff56
16th Oct 2023 13:54

A more accurate title to this article would be "Failure to provide information costs practitioner £13K".

Thanks (12)
Replying to Geoff56:
By Slim
17th Oct 2023 09:52

I know I’m small fry but 13k is a lot of money to me.

Thanks (7)
Replying to Slim:
By Geoff56
17th Oct 2023 10:16

Me too! £13K may be small change to a partner in a large firm but to us little guys, it is a great deal of money and a disproportionate punishment.

Thanks (7)
By Ian McTernan CTA
17th Oct 2023 09:56

Let's compare: Big 4 partner £1m+ per year: £5k and 8k costs = £13k, or 1.3% of his income.

Sole practitioner: let's say £100k. 13% of net income.

How did costs reach £8k?

Fines should be a percentage of income, so that they apply equally to all members as a penalty, not the present system where big firms can basically ignore them whilst small practitioners get hammered.

Perhaps if the ICAEW had better representation from small firms (not so many 'ex-big 4) they would appreciate the effect they have on the smaller practice.

Then again, membership fees should also be based on turnover, but the controlling interests wouldn't go for that either....

Thanks (14)
Replying to Ian McTernan CTA:
By Geoff56
17th Oct 2023 10:19

I agree with most of what you say Ian, but £100K for a sole practitioner? - In my dreams!

Thanks (4)
Replying to Geoff56:
By Highgate
17th Oct 2023 11:26

Conceivable! May be time to review your charging structure or client base….

Thanks (0)
By RogerMT
17th Oct 2023 10:00

£8K costs? Ridiculous and extortionate. As a matter of interest, who regulates these draconian penalties, and who regulates the costs? No-one it seems. I appreciate that there have to be penalties for non-compliance, but ICAEW seems to be little more than a grand money making scheme and a law unto itself.

Thanks (14)
Replying to RogerMT:
By Husbandofstinky
17th Oct 2023 11:53

And the Balance Sheet swells ever more for the benefit of its members....

Thanks (1)
By AndrewV12
17th Oct 2023 10:27

'During the hearing, Davidson claimed that his misconduct wasn’t fuelled by defiance, but instead was caused by “misconception”. He was under the impression that the laws of confidentiality and privilege prevented him from disclosing the information sought by the Institute. '

I will have to remember that one, laws of confidentially and privilege.

Thanks (1)
By carnmores
17th Oct 2023 10:36

same xxxx different day . is it madness or has ICAEW descended into group think?

Thanks (1)
By Mr J Andrews
17th Oct 2023 11:28

A harsh fine for adopting the Ostrich syndrome perhaps ?
But the galling aspect must be the Tribunal not directly concerned with the underlying complaint. The issue being that Davidson's liability to disciplinary action was for failing to comply with the two formal letters referred to [ in the complaint ].

Thanks (2)
By Casterbridge Hardy LLP
17th Oct 2023 11:31

Their is an absence or proportinality (again)

Thanks (1)
By Milamb
17th Oct 2023 13:27

I agree: any article featuring "costs practitioner £XXX" should be the total costs - £13k here.
Secondly, on the 'Costs' part, presumably the ICAEW has a calculation basis for these costs (external legal fees, internal management time, etc.). Is it ever 'audited'? I'd like reassurance from the ICAEW of this.
Thirdly, perhaps controversial, but I'd expect the 'Penalty' to exceed the 'Costs' (if reasonable of course, not this high) as an appropriate balance.

Thanks (1)