Communication is key - the importance of effective reasoning

It is well known that Disciplinary Panels and other quasi-judicial Tribunals must be careful to give appropriate reasons for their decisions. This important principle is however sometimes more cited than necessarily understood, or indeed implemented in practice. A couple of recent examples from the case law provide a timely opportunity to review the requirements.

In C v Special Educational Needs and Disability Tribunal and Another (2007), C saw fit to challenge the decision of the Tribunal on grounds that it had misunderstood, failed to take into account or otherwise given inadequate reasons for rejecting expert evidence which had been advanced at the Hearing. That challenge was rejected by the Administrative Court in England on the basis that, although the Tribunal's decision did not refer in any specific detail to the expert's evidence, it was nonetheless apparent from its decision that the expert's evidence had been considered by the Tribunal and weighed against other available evidence. Moreover, the Tribunal had provided proper written reasons, explaining its decision, in a letter issued to C.

In the more recent case of Yerolemou v Law Society (2008), however, the same Court held that the Solicitors' Disciplinary Tribunal in England and Wales had acted inappropriately in striking a solicitor off the Roll. It was alleged that the solicitor had failed to honour undertakings to register certain property charges, however a number of reasons were advanced by the solicitor in question in mitigation for his alleged conduct. The Tribunal appeared to ignore those reasons in stating in its decision that the solicitor had failed to offer any reasons or explanations. In light of this defect in the Tribunal's reasoning, the sanction imposed by the Tribunal was, in the opinion of the Court, unduly onerous.

These cases serve as a reminder of the importance of appropriate reasoning. It is not sufficient, however, for a decision to be well reasoned, if this is not also evidenced from the Panel's written communication of its decision.

What reasons should be communicated by the Tribunal? It is not the case that Tribunals require necessarily to record in writing every aspect of their detailed consideration of the case. Indeed, to do so may actually detract from the clarity of the decision. In most cases, what is actually required is simply a relatively brief, clear statement of the Tribunal's findings and determination, making it clear that it has properly had regard to all of the evidence presented and setting out briefly the considerations which have led it to the conclusions at which it has arrived. As it was put by Lord Donaldson, MR, in R v Civil Service Appeal Board ex parte Cunningham (1992), the duty of the Tribunal is to, "outline reasons sufficient to show to what they were directing their mind and thereby indirectly showing, not whether their decision was right or wrong, which is a matter solely for them, but whether their decision was lawful".

Put differently, by Lord Lane, CJ in R v Immigration Appeal Tribunal, ex parte Khan (Mahmud) (1983), "The important matter which must be borne in mind by Tribunals … is that it must be apparent from what they state by way of reasons, first of all that they have considered the point which is at issue between the parties, and they should indicate the evidence upon which they have come to their conclusions". 

In short, a Respondent is entitled to know to what the Tribunal has applied its mind and upon what basis it has arrived at its findings and determination.

It is worth recalling in this context that reasons are normally appropriate not only in relation to the Panel's substantive findings and decision, but also in relation to its consideration and determination of the question of sanction. In particular, it should be apparent from the Panel's decision that it has applied its mind to the full range of possible disposals available, making it clear as to the considerations which have led it to arrive at its decision in relation to sanction. Subject to the terms of the particular disciplinary scheme, it should not normally be presumed that any sanction will be appropriate and the Panel's decision should include consideration as to why the imposition of a sanction (as opposed to no sanction) is to be preferred.

As borne out in the case of Yerolemou, it will be particularly important in relation to sanction to demonstrate that any basis for mitigation advanced by the Respondent has been properly considered.

The moral of the story here is clear. It is not sufficient for tribunal panels to merely pronounce their decisions, no matter how well reasoned they may be in theory. The reasoning behind their decision must be adequately communicated to the Respondent, to avoid any potential challenge of unfairness.  Adequate reasons should ensure that the Respondent is not kept 'in the dark' and that the requirements of fairness are observed.

For further advice in relation to the role and functions of Tribunals, or for information on our training programmes in relation to disciplinary proceedings, please contact Ben Kemp.

11 June 2008

Who pays the price of regulation? More costly for respondents than regulators?

The question of how appropriately to fund professional disciplinary proceedings remains contentious. This issue is currently at the forefront of the minds of the Accountancy and Actuarial Discipline Board (AADB), who published a consultation document in January seeking views on how disciplinary proceedings should be funded. This follows on from a significant adverse costs award arising from its investigation into Mayflower Corporation plc which took place in 2006, where the AADB was found liable for costs in the region of £1 million after allegations were found unproved against the Respondent. One can understand the AADB's concerns, and its wish to review the costs proceedings in its disciplinary scheme in light of this decision. How then should costs be dealt with in disciplinary proceedings?

In traditional civil litigation, in general terms, an award of costs follows a party's success, which leaves the situation relatively clear. However, disciplinary schemes are founded in the public interest, to ensure that professionals adhere to the standards of conduct expected of them, which distinguishes them from the discretionary nature of court litigation. A further distinguishing feature is that professionals have obligations (either contractual or statutory) imposed upon them when they become members of their professional bodies. There is a public interest in the regulation of the duties and obligations of members of such professional bodies. The fundamental question here is who should meet the costs of disciplinary proceedings, when it is alleged that these obligations have been breached?

Individual disciplinary schemes will differ on whether costs can be awarded, against which party they can be awarded, and how those costs will be calculated. In this article, we consider the question of what is the appropriate balance to be struck in this area, recognising the public interest function of professional regulators, as well as the interests and rights of the individual professional who is the subject of disciplinary proceedings. To what extent is it appropriate to ensure a level playing field between each of these interests?

The extent to which individual disciplinary schemes make provisions for costs differs substantially. In a medical context, it has historically been the case that costs will not be awarded, with the General Medical Council rules for Fitness to Practise proceedings being silent on the issue of costs.

On the other hand, certain schemes are very prescriptive when it comes to the issue of costs. For example, the disciplinary rules of the Institute of Chartered Accountants in Scotland (ICAS) make provision for a direction that the member pays the Institute a sum that shall be specified by ICAS, which will include the expenses of the investigation, the preparation for the Tribunal hearing, the hearing itself and any subsequent appeal. If an award of costs is made against the Respondent, this must be paid within 21 days. There is no provision for an award of costs against ICAS, should the Respondent be successful in defending the disciplinary case.

The Actuarial Profession takes a middle ground, in stating that the Disciplinary Tribunal Panel can make an award of costs against the Respondent or the profession, as it considers appropriate. Other schemes vary in their guidance on costs, but in general terms, costs are more readily awarded against a Respondent, with few cases of an award in a Respondent's favour when charges against them have not been ultimately upheld at a Tribunal hearing.

The current leading case which adjudicated upon this matter is that of Baxendale-Walker v Law Society (2007) EWCA Civ 233. In that case, the appellant solicitor appealed against a ruling upholding a decision of the Solicitors' Disciplinary Tribunal to suspend him from practice for three years and against an order requiring him to pay 60% of the costs incurred by the Law Society in the disciplinary proceedings. The Respondent argued that the decision to suspend him for three years was plainly excessive and the decision on costs was unjustified. The appellant's appeal was dismissed. It was held that unless a complaint was improperly brought or, for example, had proceeded as a "shambles from start to finish", when the Law Society was discharging its responsibilities as a regulator of the profession, an order for costs would not ordinarily be made against it on the basis that costs followed the event. The "event" was simply one factor for consideration, was not a starting point, and there was no assumption that an order for costs in favour of a solicitor who had successfully defeated an allegation of professional misconduct would automatically follow. It was emphasised that proceedings were brought in the public interest and for the maintenance of proper standards. For the Law Society to be exposed to the risk of an adverse costs order simply because properly brought proceedings were unsuccessful might have a chilling effect on the exercise of its regulatory obligations, to the public disadvantage. This decision clearly favours the regulator, when bringing a case against a Respondent in the public interest, to the detriment of the Respondent. The implications of the decision are that the Respondent will not necessarily be entitled to an award of costs even where he has been successful in refutting the charges laid.

Does this, however, create an inappropriately un-level playing field between an individual professional member and a regulator? Could it, for example, be argued that a Respondent's human rights are being breached as there is not 'equality at arms' as between the Respondent and the regulator?

Costs determinations arising in the context of professional disciplinary proceedings will usually form part of the determination of one's 'civil rights and obligations' for the purposes of Article 6 of the European Convention on Human Rights (the right to a fair trial within a reasonable timescale). Furthermore, Article 6 does guarantee the principle of equality of arms in relation to civil proceedings. The principle requires a fair balance to be struck between the parties so that each party is placed in a position such as not to be unfairly disadvantaged vis-a-vis his opponent (in this case, the regulatory body).

A Respondent has no alternative but to take part in proceedings (under the terms of their membership of their professional body, either contractual or statutory), in the knowledge that he is unlikely to be awarded his own costs because of the public interest arguments in favour of the regulator. On the other hand, the regulator faces a much lower costs risk, knowing that if successful it can recover its costs, and even if unsuccessful, it will be unlikely to pay the costs of the Respondent. The extent to which this point may arise will depend upon the scheme rules and the circumstances of the particular case. Ultimately, it is a point which may yet require to be tested by the courts weighing the requirements of fairness to the Respondent against recognition of the proper public interest functions of the regulator.

If you would like guidance on the issue of costs in regulatory proceedings, or on any aspect of your own disciplinary regime, please do not hesitate to contact Julie Matheson.

11 June 2008

Delay, absence of a respondent and bias of the decision maker - the court's views on these thorny issues

The constantly evolving world of professional regulation has again seen clarification from the courts with regard to the issues of delay, proceeding in the absence of a Respondent and perceived bias. In this article we examine recent judicial decisions and their implications for regulators and Respondents alike.


Article 6 and Delay
What is the effect of delay in bringing proceedings which may infringe the Article 6 right to a determination of civil rights and obligations within a "reasonable time" ? The position in Scotland and England had been confused by differing opinions of the Privy Council (R v HMA) and the House of Lords (Attorney General's Reference (No. 2 of 2001)). The consequence of these decisions was that, in Scotland, this delay resulted in the proceedings against an accused being brought to an end as a fair trial was not possible, there having been an unreasonable delay. In England, however, proceedings could continue where the delay ceased and all reasonable steps were taken to ensure an expeditious resolution of the matter.

In Speirs v Ruddy, the Privy Council had the opportunity to reconsider its decision in R and came to the view that the position in Scotland and England should be the same. As a consequence, proceedings must only come to an end if a fair trial cannot be held as a result of the delay. If it is still possible to try a Defendant fairly, notwithstanding the delay, proceedings will be allowed to continue. Although these cases are set in a criminal context, the principle would be equally applicable in a civil context.

This is a welcome decision in that the disparity in the law of England and Scotland has been resolved, with the Privy Council adopting a pragmatic resolution to the position. As a consequence, the Respondent will face an uphill struggle in attempting to argue prejudice due to perceived delay, when ultimately, despite the delay, a fair trial is still possible.

Article 6 and an absent Respondent
In Vaidya v GMC, the High Court was satisfied that a General Medical Council panel had been entitled to refuse an application for an adjournment where the Respondent was absent from the Hearing. The Court was satisfied that there was no breach of Article 6 of the European Convention on Human Rights, or any unfairness to the Respondent, as he had had an opportunity to attend and put forward a defence but had chosen not to exercise that right.

This decision is also welcome confirmation that a Respondent cannot frustrate disciplinary proceedings by not co-operating or attending Hearings. Where they have been given an opportunity to participate and do not exercise that opportunity, the Tribunal or body can proceed without fear of falling foul of Article 6. This decision can only be of assistance to Regulators in attempting to carry out their regulatory and disciplinary functions in the public interest.

Conduct of the decision maker
Judges and tribunal members have been reminded by the courts of the importance of their conduct during Hearings and of acting in a manner which could not give rise to any impression of favouring one party. The test by which judicial bias is tested is that of the "fair minded and informed observer". In EI Farargy v El Farargy the Court of Appeal was not impressed by remarks made by the Judge which were intended as jokes, which it considered to be mocking and disparaging. It found the Judge was wrong not to recuse himself having made the remarks and while the Court or tribunal may engage in proceedings and ask questions of the witnesses, it must not engage in hostile cross-examination which could give the impression of bias or at least a predisposition against a witness or party. As the Court of Appeal remarked in Amjad v Steadman-Byrne, the Judge must not give the impression of having formed "a firm view in favour of one side's credibility".

However, as the Court of Appeal remarked in Mortgage Credit Ltd v Kalli , even if the Judge had "descended into the arena" in an inappropriate manner and appeared hostile to one party, an appeal will not succeed if it was inevitable that that decision would be reached notwithstanding the Judge's intervention.

A note of caution to those who have concerns about the conduct of a tribunal or Judge: the time to raise concerns is when you have them, not once a decision has been made. "Appellate and reviewing Courts tend not to look favourably on complaints of perceived bias made only after the complainant has taken his chance or the outcome is found unwelcome" (Amjad v Steadman-Byrne).

The organic nature of judicial decisions in this area means that the law is constantly changing. If you have any queries in relation to these cases, or disciplinary and regulatory proceedings in general, please do not hesitate to contact Paul Reid. 

11 June 2008