On 7 March 2018, the Court of Appeal handed down its now widely reported decision in the matter of Wingate and Evans v SRA; SRA v Malins  EWCA Civ 366 and in doing so sent shockwaves within the disciplinary world (see Laura Vignoles' blog and Kate Galza's blog for Kingsley Napley’s previous commentaries).
Prior to the Court of Appeal’s decision there was uncertainty as to whether ‘dishonesty’ and ‘integrity’ were synonymous or distinct terms in the regulatory context. In this joint appeal the Court of Appeal ruled in favour of the latter. Integrity was deemed a more ‘nebulous concept than honesty’, ‘less easy to define’ and involving ‘more than mere honesty’. It was ultimately held to be a ‘useful shorthand to express the higher standards which society expects from professional persons and which the professions expect from their own members.’
Importantly, the joint appeals were solicitor centric. Whilst the Code of Conduct for solicitors does not define the term ‘integrity’ this is not the case for accountants. Take the ICAEW’s Code of Ethics where integrity is specifically defined as ‘to be straightforward and honest (our emphasis) in all professional and business relationships.’ The ACCA Code of Ethics and Conduct and CIPFA Standard of Professional Practice on Ethics both repeat this definition. CIMA’s Code of Ethics outlines a similar definition, namely: ‘being straightforward, honest and truthful in all professional and business relationships’. The Financial Reporting Council’s 2016 Revised Ethical Standard defines integrity as: ‘being trustworthy, straightforward, honest, fair and candid….’
It can therefore be interpreted that the definition of integrity is different as between accountancy regulation and solicitor regulation. For solicitors, the principle of integrity is not defined; for accountants integrity is accepted across the various regulatory bodies to mean ‘straightforward and honest’. Whilst in the solicitor world, and other professional spheres, integrity may be a ‘nebulous concept’ that is ‘less easy to define’ for which Wingate and Evans now provides useful guidance and clarity, that is not the case for accountants who can revert to their governing Codes for an unequivocal definition of the term; a definition which can be shortened to ‘integrity equals honesty’. For accountants, so far as their regulators are concerned, these principles, according to their ethical codes, are treated one and the same.
The question that arises is how disciplinary panels for the accountancy regulators will interpret the principle of integrity going forward when faced with the decision of Wingate and Evans, which has general application across regulated professions, and the accountancy Codes. Which will take precedence?
In our view, the professional codes take precedence. They have set an unambiguous standard in terms of integrity which accountants have ‘signed up to’ on becoming members. Were panel members to divert from the definition of integrity as clearly stipulated in the Codes and treat integrity and dishonesty as distinct principles as in Wingate and Evans this would introduce a degree of uncertainty which undermines the very principle that law should be certain and predictable.
We are still in the early days so far as this issue is concerned. As cases are heard by accountancy Disciplinary Tribunals, we will establish how the accountancy bodies deal with integrity, and how the panels deal with the principle in their decisions. For now, watch this space.