E-Regulator: R. (on the application of Hill) v Institute of Chartered Accountants in England and Wales [2012] EWHC 1731 (QB)

6 August 2012


Decision date: 26 June 2012

Absence of panel member during crucial part of hearing was, whilst permissible under the relevant rules, a breach of natural justice and fairness.

The claimant in this matter (H) was a chartered accountant who had applied for judicial review of a decision by the defendant, the Institute of Chartered Accountants in England and Wales (the Institute) that had been made in the course of disciplinary proceedings.

It was alleged by the Institute that during the course of conducting his professional work H had committed an act or default likely to bring discredit to himself, the Institute or the accountancy profession.

The Disciplinary Committee hearing commenced on 10 November 2009, and took place over 6 days. The Committee panel consisted of a Chairman, a chartered accountant and a lay member (M). The panel were assisted by a legal assessor, and H was present and represented by an experienced solicitor (C).

On the fourth day of the hearing, 18 December 2009, the Chairman explained to all parties that the panel would need to rise at 5.00pm, although it had been anticipated that H’s evidence would have concluded by this time.

At approximately 3.00pm the Chairman notified C that under the rules of the Institute it was possible, if all parties agreed to continue the hearing after 5.00pm, with a two member panel in M’s absence. It was agreed by the representative of the Institution and C, on behalf of H that the hearing could continue in the absence of M. There was an exchange between the Chairman and C, documented within the transcript, in which the Chairman explains that a transcript would be provided to M following the conclusion of the hearing. C stated that if a transcript was provided to M he would ‘certainly have no objection to (M) leaving at five.’ 

M left the hearing at 5.00pm and cross-examination of H continued until approximately 6.35pm. Once the cross examination had concluded, the Committee adjourned and the matter was reconvened to hear closing arguments to a later date.

The hearing recommenced on 27 January 2010, M was in attendance on the Panel, and C made no objections to his attendance or to the procedure adopted on the previous occasion. H was re-examined, cross-examined and the panel members also questioned H at length. M asked H questions which indicated that he had read the transcript; in particular that he had knowledge of the information obtained during the 1 hour 35 minutes he was absent.

The Committee gave the decision on 8 April 2010 that the 14 allegation were proved and this resulted in H being excluded from the membership of the Institute, to pay a fine of £25,000 and costs of £32,000.

H appealed this decision to the Appeal Committee who dismissed the appeal on the grounds that the temporary absence of M did not deprive the Committee jurisdiction to hear the complaint and that any procedural irregularities arising from the absence of M did not prejudice H and had been waived by H on behalf of C.  C applied for judicial review of this finding.
Lang LJ held that the Committee’s decision to sit briefly without M did not impact upon its ‘jurisdiction to enter upon the inquiry’ nor did it affect its ‘constructive jurisdiction’. It was a procedural decision taken by the Committee ‘in the course of the inquiry’ or when exercising its adjudicative jurisdiction and therefore the case of Essex CC v Essex Incorporated Congregational Church Union [1963] A.C. 808 was applied, and the Committee did have the power under its rules to proceed with the hearing in the absence of M.

Lang LJ then went on to consider whether it was a breach of natural justice or fairness for the Committee to proceed in the absence of M in the circumstances of the case of H.

It was decided that in the case of H there was no need for the Committee to depart from its usual rule that all panel members should hear the case in its entirety. Although M was only absent for 1 hour and 35 minutes, he missed a crucial part of H’s cross-examination, and the Committee could have adjourned and resumed the cross-examination at a future date, given that the hearing would need to be reconvened in any case, to deal with submission on sanction. The Committee had therefore failed, without justification, to conduct the proceedings in accordance with the rules of natural justice and fairness.

The issue of whether an effective waiver of this breach was evident in this matter was then considered. Although it had been found that the Committee had failed to act in accordance with the rules of natural justice and fairness, H had voluntarily waived his right to object to M’s temporary absence and was bound by that waiver, Locabail (UK) Ltd v Bayfield Properties Ltd (Leave to Appeal) [2000] Q.B. 451 applied. The claim for judicial review was therefore dismissed.

This case is a stark reminder to practitioners and advocates to raise any concerns they have as to the process of the hearing at the time it occurs and on transcript, lest it be said that there has been a waiver of their client’s rights, making appeal difficult.

Amicie Knowles

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