UK: Supreme Court Considers Double Jeopardy In Professional Disciplinary Proceedings

Last Updated: 25 March 2011
Article by James Roberts and Germaine Gillen

The professional indemnity market will welcome the recent decision of the Supreme Court in R (on the application of Coke-Wallis) v ICAEW, in which the Law Lords upheld the principle of res judicata and prevented the ICAEW, the accountants regulator, from bringing disciplinary proceedings twice in relation to the same misconduct by an accountant. This was after the ICAEW had failed to successfully bring charges the first time because of a procedural error.

Although the case concerned the activities of an accountant and his regulator, it is of general interest and significance for all the professions, especially in the current climate of increased regulatory attention and pressure.

Of particular interest, are the Lords' comments on the public interest in the efficacy of the regulator's disciplinary function. Lord Clarke expressly said that he saw the force in principle of introducing a public interest exception to the res judicata rule in disciplinary cases such as these, but recognised that it was a matter for Parliament to legislate. Lord Collins also expressed displeasure at the "thoroughly undesirable result ... for purely technical and unmeritorious reasons ... the effect of the decision of this court is that a person who has shown by his discreditable conduct that he is not fit to practise may continue to do so. The primary purpose of disciplinary proceedings is not to punish, but to protect the public, to maintain public confidence in the integrity of the profession, and to uphold proper standards of behaviour".

Background

Mr Coke-Wallis, a chartered accountant in Jersey and a member of the Institute of Chartered Accountants in England and Wales (ICAEW), applied for judicial review of a decision by the ICAEW Investigation Committee to "prefer" (bring) a second disciplinary complaint against him. The second complaint arose from the same conduct, which had resulted in criminal proceedings against him in Jersey, as the first complaint, which had been dismissed by the disciplinary tribunal.

Mr Coke-Wallis carried out regulated financial services work through a number of trust companies in Jersey. In 2002 the Jersey Financial Services Commission issued a direction that no records or files in respect of his companies or customers should be removed from the companies' offices and that the companies should cease to trade. However, Mr Coke-Wallis was found at the St Helier ferry terminal with customers' documents in his car, and subsequently convicted in Jersey of failing to comply with the direction.

The first complaint

In 2004, the ICAEW preferred its first complaint against Mr Coke-Wallis, relying on the fact of his criminal conviction (rather than reference to the underlying conduct). The disciplinary tribunal found that the conviction did not correspond to an indictable offence in England and Wales and was not therefore conclusive proof of "any act or default likely to bring discredit on himself, the Institute or the profession of accountancy" under the relevant bye-law. It therefore dismissed the complaint.

The second complaint

The ICAEW then preferred a second complaint, arguing that the first complaint had been brought on the basis of the conviction, whilst the second complaint was being brought on the basis of Mr Coke- Wallis' underlying conduct. Mr Coke-Wallis complained that the two complaints made the same allegations, and applied to dismiss or stay the second complaint on the grounds of autrefois acquit and res judicata (ie, that no one should be vexed twice in respect of one and the same cause) or on the basis of abuse of process. A differently constituted disciplinary tribunal rejected the application and Mr Coke-Wallis sought judicial review. In the meantime, the second complaint was heard and Mr Coke-Wallis was ordered to be excluded from membership of the ICAEW and a costs order was made against him. These sanctions were stayed pending the outcome of the judicial review proceedings.

Supreme Court ruling

At first instance the High Court dismissed the application, and the Court of Appeal dismissed the subsequent appeal. However, the Supreme Court has now unanimously allowed the appeal, with Lord Clarke giving the leading judgment.

Lord Clarke considered the appeal under the doctrine of res judicata, on the basis that the first complaint gave rise to a cause of action estoppel (ie, that a party cannot assert a cause of action against another party where the non-existence of the cause of action has already been determined by a court of competent jurisdiction in previous litigation between the same parties). He considered that the principle applied to disciplinary proceedings of this kind and that the two complaints were based on the same grounds, namely the failure to comply with the direction of the Jersey Financial Services Commission. A fair reading of the first complaint was that the ICAEW sought to rely on the conviction as conclusive evidence of the underlying breach, not that it relied on the conviction itself as a breach. Lord Clarke went on to find that the tribunal's first decision was both final and on the merits and thus all the constituent elements of cause of action estoppel were established.

The Supreme Court held that the appeal should be allowed, with the result that the second tribunal's decision to exclude Mr Coke-Wallis from membership of the ICAEW could not stand. Lord Collins commented that "it is unfortunate that the Institute's procedural error should have had such farreaching (and absurd) consequences". Lord Clarke saw force in the creation of a public interest exception to the strict application of the doctrine of cause of action estoppel but noted this was a matter for Parliament to legislate upon rather than the courts.

Lord Clarke and Lord Collins both briefly addressed the principles of autrefois acquit and convict, with Lord Collins noting that they do not apply to disciplinary proceedings, which are civil in nature. In relation to the abuse of process allegations, although Lord Clarke noted that the question of abuse of process raised some points of interest, he considered it would not be appropriate, in the circumstances, to express an opinion on them. Lord Collins commented that if this had been a case for application of an abuse of process approach, he would have had no hesitation in concluding that the second set of proceedings was not an abuse.

Comment

The Supreme Court's decision depended on a somewhat technical analysis of the ICAEW's bye-laws and complaints, with the result that, despite his conduct (which was criminal under Jersey law), Mr Coke-Wallis may continue to be a member of the Institute. Whilst the particular rules of other disciplinary regimes could, in principle, lead to a different result, the case emphasises the general force of the double jeopardy rule in relation to such proceedings.

This decision has also raised the issue once more of whether a "public interest" exception to the double jeopardy rule in professional disciplinary proceedings can be justified. Critics of the proposition say that, unlike with the medical profession, the public interest is not so immediate and compelling for professionals such as accountants so that it should override the very reason for creating a double jeopardy rule in any context. As many disciplinary hearings are held in public there are indeed valid reputational concerns for professional firms who might have to go through the hoops to clear their name more than once. This is particularly so in cases where the regulator's first attempt at charging the firm has failed because of a procedural or other technical error on their own part.

On a more general note, this case highlights the interesting and complex questions that result from parallel criminal, civil and regulatory proceedings. Professionals are facing increasing exposure to regulatory proceedings in the current climate, and will be very much aware that a civil claim or criminal proceedings affecting their practice could very well lead to their regulator taking a closer look at their activities.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

Disclaimer

Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

Registration

Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

Cookies

A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

Links

This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

Mail-A-Friend

If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

Security

This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.