Sorry for the long silence. SIP9/fees have ruled my life for the past few months and I’ll share my thoughts on those when the fog has cleared. In the meantime, I thought I’d catch up on something far less controversial (you’d think!): SIP1’s requirement to “report” IPs to the Complaints Gateway or to the RPB. Does this mean that reports will be handled as full-blown complaints or is there another way?
Why shouldn’t all reports be handled as formal complaints?
Well, imagine you are a licensed IP working for other licensed IPs. Maybe you’re in that boat now. Maybe you’re in a firm’s compliance department. Maybe you’re a case manager. Say you become uncomfortable about something you’ve seen, something that you think triggers the SIP1 reporting requirement. Should you to report it via the Insolvency Service’s Complaints Gateway?
What would happen next? Would the RPB write to the IP providing a copy of the report? The IPA’s complaints procedure, for example, states that this is done in all complaint cases.
Clearly, this is unhelpful. But does elevating the need to report concerns to a SIP requirement rule out any alternative to lodging a formal complaint?
Does SIP1 allow IPs to discharge their reporting duty by whistle-blowing to the RPB?
“An insolvency practitioner who becomes aware of any insolvency practitioner who they consider is not complying or who has not complied with the relevant laws and regulations and whose actions discredit the profession, should report that insolvency practitioner to the complaints gateway operated by the Insolvency Service or to that insolvency practitioner’s recognised professional body.”
This appears to give IPs a choice: either they may lodge a (formal) complaint via the Gateway or they can report to the IP’s RPB.
What is the destiny of a “report” to the RPB?
The MoU between the Insolvency Service and the RPBs (https://goo.gl/ICqHEo) suggests that there is no practical distinction. It defines a complaint as “a communication about a person authorised as an insolvency practitioner expressing dissatisfaction with that person’s conduct as it relates to his or her professional work as an insolvency practitioner in Great Britain, or with the conduct of others carrying out such work on that person’s behalf.” The MoU then states: “Each Recognised Professional Body will forward to the Authority any Complaint received by it within five Working Days of receipt” and then the Authority, the Insolvency Service, will process the Complaint in the usual manner.
So this would appear to complete the circle. It appears that however an IP seeks to report a matter, it is going to be handled as a complaint sooner or later.
Is there no way to whistle-blow to a regulatory body?
So it seems that all reports will end up in the Complaints Gateway. This seems wrong, doesn’t it? After all, the Insolvency Service is a “prescribed person” for the purposes of whistle-blowing about misconduct in companies generally (https://goo.gl/cIkGL4). It doesn’t make sense to leave those working within the insolvency profession with nowhere to turn.
Surely the Service appreciates that IPs (and others employed by IPs) might want to use a far more discreet method than a formal complaint to bring their concerns to the attention of the regulatory bodies. I certainly hope that the Service would not look to enforce this aspect of the MoU against the RPBs. We must be able to trust our regulatory bodies to act sensibly when dealing with such sensitive situations.
To be honest, I haven’t asked anyone at the Service for comments. However, I have sought the views of some within the RPBs.
The IPA’s view
Alison Curry gave me this answer:
“If the practitioner is reporting regulatory intelligence, in discharge of their SIP 1 obligations (and their membership rules, as the case may be) then they may do so to the RPB of the practitioner reported upon. In such an instance, presumably, they could maintain anonymity if they chose, but could not be expected to be appraised of an outcome (i.e. they would not be a complainant in the formal sense). Presumably then the RPB will have a process by which that intelligence is fed into their monitoring processes. We certainly do and expect the IS to be monitoring that others do also.”
Alison also pointed out that, as information may end up in the monitoring stream, it could result in a referral to the Investigation Committee (which deals with complaints). However, this would be a referral from the Membership & Authorisation Committee (which deals with monitoring), so I think the whistle-blower’s identity would be unlikely to feature in the “complaint” referral, as the chances are that the IPA’s monitoring team will have gathered their own evidence in order for the M&A Committee to consider the issue in the first place.
David Menzies gave me this answer:
“You will be aware that the normal complaint procedures as agreed by the IS and the RPBs are that complaints should be made through the Complaints Gateway. RPBs also receive regulatory intelligence and it is possible that information relating to an IP’s misconduct could also be received by the RPB in that manner. In reality whether information is submitted through the complaints gateway or via an RPB is not critical, the important aspect being that the information is transmitted in the first place…
“The issue of the reporter’s identity being disclosed is of course something that no guarantees can ever be given on. If matters eventually proceeded to a disciplinary tribunal then certain documents would have to be put before the tribunal and that would most likely include correspondence with the complainer. There is also the possibility that if the IP who was being complained against submitted a subject access request under Data Protection legislation then it may be difficult to justify not disclosing the correspondence containing the complaint. There may well be circumstances where we can withhold a complainant’s identity but I think that this would need to be looked at on a case by case basis.”
The Other RPBs
I won’t quote my ACCA contact here, as it wasn’t an “official” response. Nevertheless, I did learn that ACCA’s monitoring team receives intelligence – from IPs as well as the other RPBs – and this is similarly absorbed into its monitoring processes, rather than put through the formal complaints process where the discloser doesn’t wish to lodge a formal complaint.
I suspect also that this is the case with the ICAEW and, to be fair to them, they were hoping to revert to me with a consensus view once this matter had been discussed at the Regulators’ Forum a couple of months’ ago. I expect that the demands of other SIP revisions have overtaken the publication of any guidance on this matter.
So whistle-blowing to the IP’s RPB can count as SIP1 compliance?
From the comments I have received, it would seem so. It also seems to me that the RPBs would not treat it as a formal complaint and thus pass it to the Insolvency Service for processing via the Gateway. Confidential intelligence-delivery worked within RPBs before the revised SIP1. The revision certainly was not intended to close any doors that were previously open.
What about your duty under your RPB’s Membership Rules?
Within all the RPBs’ membership rules/regulations, there is an obligation to report the misconduct of another member. The purpose of the revised SIP1 was to expand this obligation so that, in effect, the same rules apply whether the offending IP is a member of your RPB or not.
However, this means that, technically, if you have lodged a complaint via the Insolvency Service’s Gateway, you may need to report the matter also to your RPB so that you comply with its membership rules. This does seem a bit of unnecessary duplication, however, and I would hope that an IP would not be beaten about the head for complaining only to the Gateway.
What acts should be reported?
As quoted above, SIP1 sets out two criteria:
- non-compliance with “the relevant laws and regulations” AND
- actions that discredit the profession.
I am pleased to see that, at least with the IPA, its rules have been amended in the past few months clearly to bring them in line with the revised SIP1. Previously, their rules had stated “misconduct” needed to be reported, which could have constituted simply a breach of a SIP, statutory provision or the Ethics Code. Now, the IPA has also imported reference to discrediting the profession (although also, interestingly, discredit to either the member, the IPA, or any other member) as a must-have in order to trigger the reporting requirement.
What actions discredit the profession? Actions at the far end of the spectrum will be blindingly obvious, but I reckon there is a huge swathe of greyness where subjectivity reigns. To be fair though, we have always lived with this issue. The revised SIP1 wasn’t meant to make our lives more difficult – I don’t think so anyway – but rather to emphasise our personal responsibility to keep our profession clean. With this objective in mind, I have no complaints about the revised SIP1.