Many professionals will face a disciplinary complaint at some point in their careers. Some of these complaints will lead to disciplinary proceedings and possibly a full hearing before a disciplinary tribunal. What should you do next?
For registered tax agents, BAS agents and tax (financial) advisers (agents), the Tax Practitioners Board is the disciplinary body with authority to investigate disciplinary complaints about the provision of tax agent services and commence disciplinary proceedings.
Before the creation of the Tax Practitioners Board by the Tax Agent Services Act 2009 (TAS Act), agents were regulated by state tax agent boards that had limited options to impose sanctions in disciplinary conduct matters. The TAS Act and the Code of Professional Conduct set out by the Act, and associated powers, have invested the board with a wide range of powers to deal with disciplinary conduct issues, ranging from minor matters to matters warranting termination of registration. The board also has the power to commence proceedings for breaches of civil penalty provisions, which are in the nature of quasi-criminal matters. This article is primarily concerned with disciplinary matters, not civil penalty provision breaches.
Nature of disciplinary proceedings
Disciplinary matters are quite different in nature from other legal processes and proceedings.
The purpose of disciplinary matters is to regulate a profession that is in a special position of authority or influence by virtue of having particular skills or knowledge. The underlying rationale for the regulation of a profession is to protect the public by ensuring high standards by those authorised to practise in the regulated profession.
Section 2-5 of the TAS Act demonstrates its public protection purpose. It states "The object of this act is to ensure that tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct".
Section 2-5 of the TAS Act sets out that one avenue for pursuing this public protection purpose was the introduction of a Code of Professional Conduct for agents and providing for sanctions to discipline agents.
Section 30-10 of the TAS Act contains the Code of Professional Conduct which applies to registered tax agents, BAS agents or tax (financial) advisers.
Under section 30-15, the board may impose a sanction if it is satisfied, after conducting an investigation, that an agent has failed to comply with the Code of Professional Conduct.
If the board makes a finding against an agent, it has a range of sanction options including:
- taking no further action;
- cautioning the agent;
- requiring the agent to complete a course of training;
- subjecting the agent to specified restrictions when conducting their practice;
- requiring the agent to practise under supervision; and/or
- suspending or terminating the agent's registration.
The TAS Act also contains a number of civil penalty provisions, including prescribing penalties for providing tax agent services for reward while not a registered tax agent. The civil penalty provisions are, in some respects, similar to criminal offences and are imposed in a manner somewhat similar to sentencing, with a partially punitive purpose. Civil penalty matters should, therefore, be distinguished from disciplinary matters, while the same conduct may give rise to both disciplinary and civil penalty consequences. However, an agent might experience a sanction in a disciplinary matter to be punitive, even though that is not its purpose.
The options available to the board if a finding against an agent is made in a disciplinary matter range from taking no further action to terminating the agent's registration. Termination is a serious step not taken lightly by the board. It is important to recognise that in disciplinary matters which are distinct from most other types of legal proceedings ‒ the seriousness of any sanction ultimately imposed by the board can be directly impacted by how a tax agent handles the process of going through a disciplinary matter conducted by the board.
Tips for handling disciplinary matters
Each disciplinary matter will be different according to its facts. However, there are some practical tips that may assist agents with handling a disciplinary complaint or matter.
Do not ignore an initial complaint from a client or a letter from the board. The issue usually won't go away. Many client complaints can be resolved with early engagement. Resolution at this stage may prevent a complaint being made to the board.
Similarly, if you receive a letter from the board, engage early. Most matters are resolved before the board commences a formal investigation. Ignoring a letter from the board makes it more likely the complaint will progress to a formal investigation.
Get on the front foot
Even if you don't think a complaint has merit, is there something you can do to resolve the situation? Remember, the board's focus in disciplinary matters is on protecting the public, not on punishing agents.
You may be able to resolve a complaint at an early stage by proactively looking to resolve any concerns. Consider taking targeted and relevant steps including:
- Instituting new policies and procedures;
- Increasing office staffing levels;
- Taking a course to brush up on knowledge; and/or
- Approaching a trusted mentor for guidance and coaching.
Know where you stand
Whether the board can take action concerning certain issues is governed by highly complex legal and jurisdictional issues.
Seek independent advice to find out where you stand, and understand the legal issues.
Avoid a combative, adversarial approach
Notwithstanding the above, avoid taking an approach that is combative or adversarial.
The nature of disciplinary matters means they are focused on the protection of the public.
All too often, disciplinary tribunals perceive a combative, adversarial approach from a practitioner as being a refusal to engage with the underlying concern, a refusal to admit there are any grounds for concern and a clear indication that the conduct complained of may be repeated in future.
In the context of the more nuanced range of sanctions available to the board and the need to protect the public, a combative approach may undermine efforts to assure the board that the public is protected and a lighter sanction is more appropriate.
Be cautious about a purely defensive response
Similarly, a purely defensive response may be a risky strategy, for the reasons set out above. Having said that, there are cases where this strategy is a legitimate option, including where there are genuine grounds to doubt the facts needed to prove the conduct in question, for example, where there is extensive evidence to demonstrate that the conduct did not take place or was significantly different to the conduct alleged.
Consider notifying your insurer
Consider whether you need to notify your insurer of a matter that is the subject of a client complaint or a disciplinary matter.
Effect on other professional memberships
Disciplinary matters could affect other professional memberships and you may have a duty to disclose the disciplinary matter to other professional bodies, either at the time or at the next annual renewal.
Failure to notify, where required to do so, may compound the challenges of dealing with a disciplinary matter and create a new disciplinary issue with another professional body.
This article was first published in the National Accountant, 1 May 2017