Proposed Principles of a proportionate disciplinary process for actuaries

These are the principles that I am proposing for The International Qualified Actuaries Group.

A code of professional conduct that does not stray into personal life

Except where a court has made an adverse finding related to fraud or dishonesty.

Protection of the public

The public rely on actuaries to perform their work with skill, care and competence. This principle is at the heart of any professional disciplinary process, but the process must also be compatible with the law and the rights of members.

Natural justice, fairness and human rights

The principles of natural justice and fairness and articles of the European Convention on Human Rights shall apply in the Disciplinary Process.

Confidentiality

The principle of innocent unless proven guilty applies, and so everyone involved (including any Complainants) agree to protect the confidentiality of the accused actuary and any third parties.? The accused actuary may choose to waive part of their confidentiality and disclose that they are the subject of a complaint, its nature and the identity of any complainants.

Complainant is not a party to the process but will be kept informed

Complainants agree when submitting an allegation that they are not a party to the process and that the International Qualified Actuaries Group Limited takes over the allegation and investigates it.? Complainants will be kept informed as to progress and outcomes.

Burden of proof is on the prosecution, to the civil standard

The defence do not need to prove anything, the prosecution need to establish misconduct on the balance of probabilities (the civil standard of proof).

No moving of goal posts with regard to the membership contract

Unless changes made to the terms of membership during a membership year are clearly in the interests of an accused actuary, any such changes shall be disregarded with regard to the membership year in which any instance of misconduct is alleged to have occurred.

Equality of arms

The Disciplinary Process attempts to redress the balance between a professional body and a typically less well funded accused member, including in the following areas:

• the professional body often has access to legal advice at an earlier stage than the member
• the professional body often has access to more resources than the member, and in particular is able to bear legal costs more easily than the member
• if the professional body overreaches in a disciplinary complaint, there has often in practice been little adverse consequence for the professional body.

Allowance for membership fees having already funded a significant part of disciplinary cases

Professional membership fees include an element to fund disciplinary cases. Whilst it is right that members found guilty of misconduct should make a contribution to the costs incurred in their case (providing that no regulatory overreach has occurred), it would be double counting if they were asked to bear the whole of the costs incurred.

No fishing expeditions?

The professional body may not go looking for possible misconduct and must confine itself to investigating allegations made independently of itself.?

No mud flinging

Abuse happens if a professional body complains about multiple instances but misconduct is only found in half or just over half.? Traditionally there has been little deterrent against a professional body overreaching in this way. In the interests of natural fairness and justice, there must be significant adverse consequences for the prosecution case if the professional body overreaches e.g. by acting inconsistently, adding unwarranted charges or putting forward evidence that is weak or speculative.

Consistency in the case put forward (including with any previous disciplinary cases)

Except with the consent of both parties, or where new evidence comes to light that could not reasonably have been disclosed earlier, the prosecution may not materially change its case, and if changes are allowed, they must be disclosed to any panel with the reasons for the change. Except with the consent of both parties, or where new evidence comes to light that could not reasonably have been disclosed earlier, or if the case previously advanced was without the benefit of legal advice, the accused actuary may not materially change his or her case.? Unless the changes are due to new evidence coming to light that could not reasonably have been disclosed earlier, or with the consent of both parties, no material changes may be made to either party's case less than 21 days before a panel hearing.

In addition, the prosecution case and recommended sanctions must be consistent with any previous similar disciplinary cases (including ones where no misconduct was found) unless the prosecution discloses the inconsistency together with a credible explanation for the change.

Cards on the table, no surprises

The prosecution must inform the accused actuary at an early stage whether it regards the case as simple, intermediate or complex, and whether it regards the degree of misconduct as low, medium or high.

Unless new evidence comes to light which could not have reasonably been disclosed at an earlier stage, both prosecution and defence must disclose the evidence they rely on several weeks before any hearing.

New finding of Regulatory Overreach possible

To deter fishing expeditions/mud flinging/inconsistency/moving of goal posts or other regulatory overreach, a panel may make a finding of Regulatory Overreach, either instead of or in addition to a finding of misconduct.? If a panel makes a such a finding, then the panel must make a costs order (of the relevant Costs Limit - see below) in favour of the accused member, and if the panel also found misconduct, then the sanction for misconduct must be no more severe than a Reprimand.? This is to help ensure that prosecutions are scrupulously fair to accused actuaries as well as to complainants.

Allowance for withdrawal of allegations/complaints by complainants

If any persons who made allegations of misconduct against members subsequently withdraw their allegations in writing, such withdrawals shall be communicated promptly to the accused actuary, and shall be included in any papers put before any panel.? The prosecution must consider on receipt of such withdrawal, whether to proceed with a disciplinary case or to withdraw it. If the prosecution decides to proceed, they should set out in writing their reasons for proceeding despite the withdrawal of the allegations.? These reasons shall be included in any papers put before any panel.

Allowance for possible non independent motivation of allegations/complaints

Panels shall state in their determinations whether complaints are felt to be free from any significant external bias or motivation, and take this into account in their decisions.

Abandonment or adjournment of cases possible

The prosecution has the option to withdraw a case at any point. If the accused member has left and so is no longer a member, the case shall be adjourned with no appointed date for resumption, but may be resumed if the member applies to rejoin.

No hiding of cases where panels disagreed with the prosecution

In cases where misconduct was alleged by the prosecution but no misconduct was found, traditionally no details have been published, which provided little deterrent against regulatory overreach.? In such cases, determinations are to be published (but with the exonerated actuary and any innocent third parties anonymised).

Disclosure of minority opinion

Panels shall make decisions on any matter by a simple majority, but shall state if there was a dissenting opinion and if so what that opinion was.