Coke-Wallis v ICAEW

It cannot be often that a professional regulation case finds its way as far as the Court of Appeal, but Piers Coke- Wallis v Institute of Chartered Accountants in England and Wales [2009] EWCA Civ 730 has done so.

In the current climate, with increased regulation coming to the fore, and some professionals wondering quite what positive purpose, if any, their institutes perform, the case begs a number of questions to be raised.

The accountant, Piers Coke-Wallis, qualified with a Big 4 firm and subsequently established his own trust and accountancy practice in Jersey.

In 2002, he was “picked on” by the Jersey Financial Services Commission. It is only speculation that this might have been inspired by Coke-Wallis being in dispute with a former business partner who just happened to be rather well connected within the indigenous Jersey legal community.

In late 2002, Coke-Wallis was found guilty by a Jersey Court of attempting to remove business records from the Island. Goodness only knows why he saw fit to contravene an order to the contrary but, like many professionals of his generation, being told what to do by a bunch of box ticking administrators does not come easy to those who were raised professionally on a culture of self governance.

Coke-Wallis’ Jersey practice was closed down, much to the annoyance of his clients and professional contacts (of which I was one) who were caused significant inconvenience and financial cost whilst having no complaint whatsoever against Coke-Wallis; whose work had always been considered to be of good quality, and demonstrated an integrity that is much in demand by reputable clients with an international profile.

To add insult to injury, the JFSC seemed intent on steering Coke-Wallis’ clients to a JFSC favoured firm. To the best of my knowledge, most of Coke-Wallis’ clients reacted in predictable fashion by removing their business from the Island altogether and have probably since steered well clear. I, for one, have felt disinclined to recommend Jersey as a suitable jurisdiction; a view which has only been strengthened by the Island’s exposing itself to the risk of a potential influx of black mobile money with its recent enactment of the foundation laws.

The ICAEW, presumably at the urging of the JFSC, commenced disciplinary proceedings against Coke-Wallis; being where it gets interesting.

One would suppose that the disciplinary arm of a professional institute would not only be familiar with its very own disciplinary code but, moreover, would be nothing less than expert in the same.

But, no. Not the ICAEW. They commenced proceedings against Coke-Wallis for breach of a given bye-law, only to have their case dismissed for lack of grounds. It might be that I have looked in the wrong places but there appears to be no publicly available record of this 2005 tribunal hearing, referred to at para 5 of the Court of Appeal’s judgment. In passing, should there not at least be a statement by any public body such as a professional disciplinary board stating the justification for non publication ? After all, it can hardly be asserted that the institute’s own conduct is not of public interest when it subsequently proves necessary for that conduct to be considered by the Court of Appeal.

In the event, not to be deterred or in any way being embarrassed by their own incompetence, the ICAEW then had another go; this time under a second bye-law. The judgment gives the detail and concerns Coke-Wallis’ application for judicial review of the institute’s actions.

The court held that the defences of autrefois acquit and res judicata were not in point. The judgment reflects this being decided upon with some gusto, which might be considered odd when the same court must previously have considered the same points of law to be far from clear cut in deciding it was worthwhile to grant permission for the appeal. It is not known whether leave will now be sought to appeal further to the House of Lords.

Nevertheless, that’s now already any number of tribunal and higher court hearings, legal fees and salaries of institute administrators racked up, and all supposedly underpinned with a public interest objective. But, yet, seven years on, not one of the public (including his erstwhile clients) is known to have made any complaint to the institute nor commenced any private action against Coke-Wallis.

Which leads one to wonder why the ICAEW has seen fit to persist with their protracted litigation and to spend what one could well imagine to be upwards of £250,000 of their members’ subscriptions in pursuing a disciplinary action which was only ever going to be pyrrhic in its outcome ? 

But, if that sort of spend is the going rate for a erstwhile sole practitioner, who has not even been accused of an offence recognised by English law and, as best I am aware, is not accused by anyone to have been negligent, to have mismanaged client money or to have committed any other wrongdoing, then, suitably scaled up, how many millions of their members’ money  should the ICAEW now be spending on investigating the alleged misconduct of others, such as PWC, for example ?

Update: here

Comments

[David Le Maistre]

Mr Coke-Wallis appealed to the Supreme Court which allowed his appeal and awarded him his costs against the ICAEW. He won his case on a legal technicality with the reluctance of the court where Lord Collins described him as not fit to practise as a chartered accountant.

Mr Coke-Wallis has a habit of not paying his bills and left Jersey owing significant sums of money to people on the island including his former business partners. He was subsequently arrested in France for tax evasion but avoided criminal charges by paying the outstanding tax.