Adverse Inferences in RICS Investigations: How Should You Respond?

If you’re the subject of an investigation by the Royal Institution of Chartered Surveyors (RICS), you will receive a letter from RICS setting out the allegations against you. The letter will likely include a section on the “adverse inference” that can be drawn if you do not respond: that a Disciplinary Panel may later conclude that you have no reasonable explanation for the alleged misconduct. So what is an “adverse inference”, and what does this mean for you?
 

What is an “adverse inference”?
Inferences are any conclusions that can be drawn by a tribunal (or fact-finder) from primary facts using their reasoning and common sense. A tribunal has the power to look at primary evidence (whether this comprises statements from witnesses or documents) and draw any appropriate inferences, as long as the inferences are not procedurally unfair.

More specifically, adverse inferences are inferences that can be drawn from a party’s silence or absence – in other words, the tribunal or fact-finder can hold a party’s silence against them. If a party stays silent when presented with an opportunity to speak about allegations made against them, the tribunal may infer that this was because they did not have any reasonable explanation for their actions. Alternatively, the tribunal could infer that, even if there was an explanation, the party stayed silent because they did not believe their explanation would stand up to scrutiny.

Where does this notion of an “adverse inference” come from?
In civil cases, courts have long been able to draw adverse inferences about an absent or silent party who could have reasonably provided some material evidence. However, it was unclear until relatively recently whether disciplinary tribunals were also able to draw adverse inferences from a registrant’s silence. The case of R (Kuzmin) v General Medical Council [2019] EWHC 2129 (Admin),  however, has clarified this.

In Kuzmin, the Divisional Court held that a tribunal or fact-finder can draw an adverse inference from a registrant’s refusal to give evidence.  In that case, Mr Kuzmin, a doctor registered with the General Medical Council (GMC), faced an allegation that he dishonestly failed to tell his employer about interim conditions that had been imposed on him.  Disciplinary proceedings in the Medical Practitioners Tribunal (MPT) were brought against him.

Mr Kuzmin initially made a statement where he fully explained his conduct and denied any dishonesty. Following an unsuccessful submission of no case to answer at the close of the GMC’s case, Mr Kuzmin withdrew his witness statement and indicated that he would not give evidence. In response, the GMC obtained a ruling from the MPT that, as a matter of principle, the MPT had the power to draw an adverse inference from a registrant’s failure to give evidence. Mr Kuzmin challenged the MPT’s decision by way of judicial review.

The Divisional Court agreed with the MPT. It held that a fact-finder, such as a disciplinary tribunal, was generally permitted to draw any inferences that were appropriate from the primary facts, as long as there was no procedural unfairness or an unacceptable risk of such unfairness. In the disciplinary context, where a regulated individual had a case to answer and remained silent, it might be reasonable to draw the inference that they were unable to answer that case in whole or in part, or that they had no innocent explanation for the case against them. The Divisional Court reiterated that disciplinary proceedings were civil (and not criminal or hybrid) in nature. Moreover, it highlighted that the power to draw such inferences is also in the public interest, particularly for tribunals which are charged with regulating professionals.

Nonetheless, the High Court set out some specific guidelines. No adverse inference should be drawn unless:

• (1) A prima facie case to answer has been established;
• (2) the individual facing the charge has been given appropriate notice and warning that, if they did not give evidence, an adverse inference would be drawn – this includes an opportunity to explain why it would not be reasonable for them to give evidence, and, if it was found there is no reasonable explanation, an opportunity to give evidence;
• (3) there is no reasonable explanation for not giving evidence; and
• (4) there are no other circumstances in the particular case which would make it unfair for such an inference to be drawn.

We have covered this decision in more detail in an earlier article[2], discussing its application particularly in the context of individuals facing both criminal and regulatory investigations.

What does this mean for you?
It is clear that the High Court’s guidance in Kuzmin applies equally to RICS disciplinary proceedings. Accordingly, RICS is entitled to warn those Regulated Members being investigated that an adverse inference may be drawn if they remain silent when facing allegations.    

It is important to understand that failing to respond to a letter from RICS setting out allegations against you may have far-reaching implications. First of all, it may mean missing out on the opportunity to present your side of what is alleged to have happened. Depending on the nature of the case and the way your response is framed, this could potentially mean foregoing a valuable chance to resolve matters earlier at the investigation stage before they reach a disciplinary hearing.

Additionally, failing to respond will also prejudice your case if the matter does ultimately end up before a Disciplinary Panel. The tribunal hearing will be entitled to draw an adverse inference about your silence. Whether the inference drawn is that you have no reasonable explanation, or that you may have an explanation but not a very good one, the Panel is unlikely to look favourably on your defence if you have kept quiet throughout the entire process. In general terms, as we previously pointed out in another article on the RICS investigation process, meaningful engagement and cooperation with the investigation is likely to be in your best interests. It is required under the RICS Rules of Conduct for Members (with non-compliance potentially leading to an additional referral for misconduct), and can also be the basis for mitigation if the case reaches a hearing before a Disciplinary Panel. 

That said, if you have already received a letter, but for some reason have not taken advantage of the opportunity to respond, do not panic. There may still be arguments that can be made on your behalf to explain a failure to respond, or to displace any adverse inferences. For instance, if you have an explanation as to why it was not reasonable for you to respond within the required timeframe, such as a health condition that affected your ability to reply, this may be used to argue that no adverse inference should be drawn. Alternatively, if there are irregularities or questions around whether you have been given appropriate notice and warning of adverse inferences, or where any other circumstances exist that would make it “unfair” for such inferences to be made, these points may be used to argue against the Tribunal’s drawing of an adverse inference.

It should be noted, however, that any such arguments are highly fact-specific – they will depend on the circumstances of your case and how the RICS investigation against you has proceeded to date. Accordingly, whether you have a received a letter and do not know how to respond, or whether the investigation against you is fairly advanced and you have stayed silent, it is important that you take tailored advice. Doing so at the earliest opportunity will give you the best chance of a good outcome.

FURTHER INFORMATION

Should you have any queries regarding the issues raised in this blog please contact Julie or any member of our Regulatory team.

ABOUT THE AUTHORS

Julie Matheson is a Partner in the Regulatory team, specialising in advising firms and individuals practising in the professional services and built environment markets.  She has particular expertise in advising on compliance with RICS regulatory obligations and in RICS disciplinary matters.

Lucy Williams is Legal Counsel in the Regulatory Department with a particular specialism in legal, healthcare and financial regulation.  In her defence practice Lucy represents regulated professionals and organisations facing professional disciplinary proceedings.

Ian is an associate in the Regulatory team, specialising in the defence of firms and individuals in regulatory matters, particularly in the professional services field.