The rules and procedures which presently govern how the Institute deals with complaints of alleged breaches of professional rules are laid down in its Memorandum and Articles of Association. The Institute is anxious to ensure that complaints of alleged breaches of professional rules of conduct brought against its members are considered by a body which as far as possible is independent. Therefore, it is seeking to strengthen the disciplinary procedures presently in place and has been looking for the best way to achieve this. One of the reasons for this review has been to ensure that its disciplinary procedures meet with the standard required or expected by both the business community and government departments which deal with its members.

The Institute’s Council has been considering ways in which to strengthen its internal disciplinary process and after careful consideration has decided that to meet the standards now required for a regulatory body the way forward is to become a member of the Taxation Disciplinary Board (TDB). A proposal was agreed to amend the Memorandum and Articles of Association to this effect at the Institute’s Annual General Meeting, which took place at 17.30 on 16th September 2010 at the London Hilton on Park Lane, 22 Park Lane, London W1K 1BE.

Details about the TDB and its procedures are set out below.

About the TDB

The TDB was set up in 2001 by the Chartered Institute of Taxation (CIOT) and the Association of Taxation Technicians (ATT) to enforce their professional conduct rules. They felt that having the scheme run by the TDB will ensure that complaints of alleged breaches of professional rules of conduct are considered by a body which as far as possible is independent of the professional bodies which have laid down these professional rules. It was always the aim of the two founder bodies that other professional organisations would look to become members of the TDB.

The Board

The TDB was set up as a company limited by guarantee. The CIOT and the ATT are the current members, and now that the IIT has agreed to join it will become a third member of the company. The TDB is presently run by a Board consisting of three directors and should the IIT become a member of the Board it will have a say in any future appointment of the Chairman. Although the Board members are appointed by bodies represented on the Board, the Board is autonomous and reports to them on the same basis as any other board of directors of a company does to its members. For the day-to-day running of the scheme the TDB has appointed an Executive Director.

In looking at complaints it is essential that the process should be fair and transparent, both for the person making the complaint and for the member whose professional conduct is being questioned. Any client who uses professional services needs to feel confident that the person providing those services is applying proper professional standards in carrying out the work on the client’s behalf. At the same time, it has to be recognised that the effect on a member of having a complaint outstanding can be very damaging and distressing. A complaint may ultimately call into question whether that person can continue to be a member of his professional body and possibly even whether he can carry on providing professional services to clients. Even a minor complaint can have a very serious effect. It is therefore essential that the disciplinary process should enable complaints to be assessed relatively quickly and filter out any which are not appropriate to pursue. Those complaints which do have to be followed up should be properly considered within a reasonable time, to protect the interests both of the public and of the member concerned.

The scheme set up in 2001 was reviewed and updated in 2008. The 2008 Scheme covers failures to follow professional standards and guidelines, providing inadequate professional service, and conduct unbefitting the member. Its detailed procedures are contained in Regulations, which can be amended by the Board of its own volition.

Complaints

How does the 2008 Scheme work? Once a complaint has been received from a member of the public or from one of the member bodies, the initial assessment and examination are carried out by the Board's Executive Director in his role as ‘the Reviewer’. In the normal way, the Reviewer will seek a response from the member on the complaint, and invite the complainant to comment on that response, giving the member a further opportunity to respond, before submitting the complaint to the Investigation Committee. The Reviewer may decide that the complaint is trivial, vexatious, out of time, or outside the jurisdiction of the TDB and therefore should not be referred to that Committee. In that case, the person making the complaint can ask for it to be reconsidered by an independent assessor, whose decision is final. If the complaint involves a breach of the member body’s administrative rules, such as failure to meet the CPD requirements, there is provision for the TDB to impose a Fixed Penalty. If a member ignores or objects to such an order, the matter is referred to a Disciplinary Tribunal (although if the charges are proved, additional costs are also likely to be imposed). This is similar to the Fixed Penalty arrangements that apply in the Magistrates Courts.

Investigation Committee

The Investigation Committee is usually composed of five members drawn from a panel of individuals appointed by the TDB; the Committee is required to have a majority of lay members, with at least one professional member. The Committee considers the complaint referred to it and decides whether it discloses a prima facie case. It may decide that the complaint should be dismissed, or that there is a case to answer. Even if there is, it may decide to take no further action if the matter is not considered serious enough to warrant any of the sanctions available to a Disciplinary Tribunal, or if the evidence would not be strong enough to establish before that Tribunal that a disciplinary offence has been committed. The Committee must provide written reasons for all its decisions. Where it decides to take no further action the decision must include its findings relating to the duty of the TDB and the member bodies, as appropriate, to protect the public and the reputation of the profession.

On request, any decision to dismiss a complaint or to take no further action can be reviewed by an independent assessor, who can either reinstate the complaint where appropriate or confirm the decision. In practice most complaints for which a prima facie case has been found will be referred to a Disciplinary Tribunal.

Disciplinary Tribunal

A Disciplinary Tribunal consists of three or more persons selected from a second panel of individuals appointed by the TDB. It must have a legally qualified chairman and one member from one of the member bodies, but the majority must be individuals who are not members of these bodies. There is a Clerk to the Tribunal, also appointed by the TDB.

Once various procedural steps have been taken, there will be a hearing which the Defendant is entitled to attend. Attendance is not compulsory but is strongly advisable. He can either put his own case or have this done for him by his own representative. He can give evidence, although he does not have to do so. The case against the Defendant is put by a representative (usually a barrister) acting on behalf of the TDB. The Tribunal has to decide whether the alleged conduct of the Defendant has been proved to the civil standard (that is, on the balance of probabilities). If the charges are found to be proved, penalties can be imposed.

A wide range of sanctions is available to the Tribunal. These extend from a requirement to apologise through to the severe sanctions of suspension or expulsion from membership of the relevant professional body. If the Tribunal decides to impose a fine, this can be as much as £20,000 for each offence which is proved. In addition to the sanctions there is also a limited power to award compensation to the complainant where the Tribunal finds that there has been inadequate professional service. Where a finding is made against the Defendant, he will almost certainly be ordered to pay costs. The Tribunal must issue a written decision showing the reasons for its findings. Notification of the decision must be given to the relevant professional body and a summary of the findings will usually be published in the journals of the member bodies and on the TDB website..

Appeal Tribunal

As far as the person making the complaint is concerned, this is the end of the matter, as complainants have no right of appeal against the Disciplinary Tribunal’s decision. However, the Defendant and the TDB both have rights of appeal, on strictly limited grounds. These are that there has been a misapplication of the relevant rules and/or the relevant law, that the finding or sanction was unreasonable, or that new evidence has become available which, if it had been available earlier, would materially have affected the Disciplinary Tribunal’s findings. An appeal can only proceed if an independent Disciplinary Assessor is satisfied that it comes within the specified grounds. If permission is granted, the case is heard by an Appeal Tribunal.

The Appeal Tribunal has a similar composition to the Disciplinary Tribunal, but its members must have had no previous involvement with the case. There is a hearing, at which the party making the appeal puts its case to the Tribunal and the other party may respond. The Tribunal can dismiss the appeal, or allow it on the limited grounds already mentioned. If an appeal is allowed, the Tribunal can vary any sanctions imposed by the Disciplinary Tribunal, or replace them with other sanctions, as well as ordering payment of costs.

The procedures are designed to recognise the public interest in the operation of the 2008 Scheme and its outcome in relation to any particular complaint. All Tribunal hearings are open to the public, although there is power to exclude the press and public (but not the complainant) if desirable in the interests of justice or for some other exceptional reason. Similarly, if a Tribunal makes an order, it is required also to order that a record of this should be published. (This does not apply where there is a pending appeal against the decision of the Disciplinary Tribunal.) In cases where the Disciplinary Tribunal has dismissed the charge or ordered that no further action should be taken on the complaint, or where the Appeal Tribunal has upheld an appeal by the Defendant in full, the record will normally be published without naming the Defendant. Subject to this rule, the published record must generally name the Defendant and describe the orders made against him or her. If the Disciplinary Tribunal directs that publication is to be limited, the TDB itself has a right of appeal to the Appeal Tribunal.

Conclusion

The TDB wants to ensure that there is a fair, thorough and independent investigation of every complaint referred to it, and that any member against whom a complaint is made is fairly treated. The number of disciplinary cases it has so far had referred to it is relatively small and members who conduct themselves in a professional manner are unlikely to be exposed to the disciplinary process. The disciplinary arrangements exist first and foremost to protect the public. But in doing so, they also protect members of the TDB’s member bodies, by ensuring that the public has confidence in them. They enhance the standing and reputation of the tax profession and that can only be beneficial to all its members. It is considered that the current arrangements embody the principles, jurisdiction and powers required by a disciplinary body for the 21st century.