by Simon Cridland

In R ex. p. Coke-Wallis v. Institute of Chartered Accountants in England and Wales[1] the Supreme Court allowed the appeal of an accountant, Mr Coke-Wallis, against a decision of the Institute that he be excluded from its membership notwithstanding that he was “in flagrant breach”[2] of a direction of the Jersey Financial Services Commission and that allowing the appeal “... leads to the thoroughly undesirable result that for purely technical and wholly unmeritorious reasons the ... decision that he be excluded from membership of the Institute cannot stand.”[3]

The case concerns the applicability of the doctrines of autrefois acquit, res judicata and abuse of process to disciplinary proceedings.

The Appellant was a chartered accountant and a director and shareholder of various companies which carried out financial services work on Jersey.  In December 2002, the Jersey Financial Services Commission issued a direction to the Appellant to wind up the companies’ affairs and that “no records or files in respect of companies or customers shall be removed from the officers of the companies.”  3 days later, the Appellant was stopped by police seeking to leave Jersey with the boot of his car full of suitcases containing files relating to clients of the companies, computer servers, back-up tapes, original trust deeds and company documentation.  The Appellant was arrested and charged with the offence of failing to comply with the direction.  In September 2003 he was convicted of that offence.

In November 2004 the Respondent’s Investigation Committee preferred the First Complaint against the Appellant.  That Complaint was heard by a disciplinary committee in April 2005 and dismissed.  In March 2006 the Investigation Committee preferred the Second Complaint.  In December 2006 a differently constituted tribunal heard an application to summarily dismiss the Second Complaint on the ground that the same complaint in the form of the First Complaint had already been dismissed[4].  That application was refused.  The Appellant sought judicial review[5].

Prior to the hearing of the Appellant’s appeal to the Supreme Court, a disciplinary committee found the Second Complaint proved, excluded the Appellant from membership of the Institute and made an order for costs.

The Institute was set up under Royal Charter and was governed by bye-laws.  An analysis of the Appellant’s contention required consideration of those bye-laws.

Bye-law 4(1) provided so far as was material:-

“A member ... shall be liable to disciplinary action under these bye-laws in any of the following cases...

  if in the course of carrying out professional work or otherwise he has committed any act or default likely to bring discredit on himself, the Institute or the profession of accountancy....”

Bye-law 7 provided, so far as was material:-

“The fact that a member ... has before a court of competent jurisdiction pleaded guilty to or been found guilty of an indictable offence (or has, before such a court, outside England and Wales, pleaded guilty to or been found guilty of an offence corresponding to one which is indictable in England and Wales) shall for the purposes of these bye-laws be conclusive evidence of the commission by him of such an act or default as is mentioned in bye-law (4)(1) [emphasis added]

...

(3)        A finding of fact

...

(b)        in any civil or criminal proceedings before a court of competent jurisdiction in the in the United Kingdom...

...

shall for the purposes of these bye-laws be prima facie evidence of the facts found.

The First Complaint was dismissed because the Respondent’s disciplinary committee concluded that the Jersey offence of which the Appellant was convicted, had no corresponding indictable counter-part in England and Wales.  The Second complaint alleged the underlying conduct of not complying with the direction.

The Respondent submitted that bye-laws 4 and 7 provided for 2 distinct charges; firstly pleading guilty or being convicted of an indictable offence (7(1)); secondly, being guilty of underlying conduct which brought discredit upon the individual or the profession.

In the Court of Appeal, the Respondent succeeded in submitting that the discreditable conduct alleged in the First Complaint was the conviction which was both conclusive evidence of discreditable conduct and the discreditable conduct itself.  Lord Clarke held this was to misconstrue the byelaws[6] because bye-law 4 identified as the occurrence giving rise to liability any act of default likely to discredit the profession and went on[7] to identify examples of such occurrences.  Lord Clarke considered that on a proper construction of the bye-laws, if the occurrence could not be found in bye-law 4 the complaint must fail and that there was nothing to suggest that a conviction per se was such an occurrence.[8]

It was accepted by the Respondent that the substance of the underlying conduct was the same in respect of both complaints.  In comparing the 2 complaints, Lord Clarke concluded that the First Complaint was not to be read as meaning the act complained of as being contrary to bye-law 4(1) was the conviction per se but rather the underlying conduct of failing to comply with the direction by secreting documentation and seeking to remove it from Jersey.  That reading of the meaning of the First Complaint followed necessarily from the interpretation of the bye-laws as providing that the relevance of the conviction was only an evidential one and that a conviction per se was not capable of constituting a relevant occurrence for the purposes of bye-law 4.[9]  On this analysis, the alleged breach of bye law 4(1)(a) in respect of each complaint was the same; a failure to comply with the direction of the Jersey Financial Services Commission.

Having determined that the First Complaint was in substance the same as the Second, Lord Clarke approved of 2 propositions advanced in argument by the Respondent.  Firstly, that for the purposes of the maxim nemo debet bis vexari pro una et eadem causa[10], disciplinary proceedings fall on the civil side of the dividing line.  Secondly, where the cause of action in the sets of proceedings is the same, the relevant legal principle to be applied is the doctrine of res judicata consisting of cause of action estoppels and issue estoppel.  Lord Clarke held that the principle of res judicata did apply to disciplinary proceedings observing that the Respondent was, at least for some purposes a public body and citing Thrasyvoulou v. Secretary of State for the Environment[11].

In order for the doctrine of cause of action estoppel to be made out:-

  1. The decision must be judicial in the relevant sense.
  2. It must in fact be pronounced.
  3. The tribunal must have had jurisdiction over the parties and subject matter.
  4. The decision must be final and on the merits.
  5. The decision must have determined a question raised in the later proceedings.
  6. The parties are the same or the earlier decision was in rem[12]

Of the above the Respondent conceded (1) to (3) and also (6) and Lord Clarke held that the decision of the disciplinary committee to dismiss the First Complaint on the basis there was no corresponding indictable offence in England and Wales was a final decision on the merits and given the 2 complaints were the same it did determine a question raised in the later proceedings.

Having determined that all the constituent elements of cause of action estoppel were made out, Lord Clarke concluded that the matter was res judicata following the dismissal of the First Complaint, and declined to consider the applicability in the circumstances of the doctrine of abuse of process.  Lord Collins agreeing that the appeal should be allowed on the basis the matter was res judicta did opine, albeit obiter, that “If this had been a case for application of an abuse of process approach rather than the more rigid res judicata principles, then I would have had no hesitation in concluding that the second set of proceedings was not an abuse.”[13]

The reasoning in Coke-Wallis will only apply where there have been two successive sets of disciplinary proceedings , it does not apply where either set of proceedings was criminal or civil in nature.[14]  Equally, it will not apply where the two sets of disciplinary proceedings have been before different regulators.[15]

It may be open to argument whether the doctrine of autrefois acquit is still applicable before those regulators which apply the rules of criminal evidence and look to the rules of criminal procedure to fill any lacuna in their own procedures even if the standard of proof applied is the civil standard.[16]

The reasoning in Coke-Wallis will not apply to cases where one set of proceedings is placed on the basis of the conviction or caution per se and the other set of proceedings on the basis of the underlying misconduct.  In the GMC and GDC the overall charge is that the Registrant’s fitness to practise is impaired, and the Council in laying its case against the registrant is able to elect whether to allege impairment of fitness to practice on the basis of misconduct or as a result of a conviction or caution or both.  On this basis, the nature of the statutory regime before healthcare regulators adopting the concept of impaired fitness to practise may be such that it is capable of avoiding the difficulty which developed in Coke-Wallis.  Having said that, even where the notice of hearing only alleges impaired fitness to practise as a result of conviction or caution without descending into particularisation of the underlying conduct it is difficult to avoid a need for the Panel descending to a consideration to at least some degree of the underlying conduct as part of the hearing, indeed the prosecution opening may well descend into such detail.  In such circumstances, it may not be realistic to contend there exists a clear distinction between, on the one hand a case based on a conviction or caution, and on the other a case based on the underlying misconduct which gave rise to the conviction or caution.

As a final matter, in Coke-Wallis Lord Clarke considered whether there should be an exception to the doctrine of res judicata on public interest grounds effectively to enable a regulator to make good its own mistake in the formulation of previous proceedings, he concluded however that, although he could “see the force of the introduction of such a principle”, it was a matter for Parliament to consider whether and in what circumstances such an exception may apply.  It remains to be seen whether the legislature takes up this indication.

Simon Cridland is a barrister practising at 3 Serjeants' Inn and specialises in all aspects of Professional Discipline and Regulatory law.  He is recommended in Chambers and Partners 2011 in respect of Professional Discipline.