In this month's Feature Story, Mike...

In this month's Feature Story, Mike Essex CA, the Institute's Director of Practice Review and Licencing (PR&L) has outlined the bylaw requirements for members in public practice with regard to professional liability insurance. Requiring as it is coverage of our members is just single of the ways the Institute fortifys the public interest and its concede ability to continue as a self-regulatory profession. Although the PR&L Committee's primary mandate is educational, it also performs a regulatory function with regard to the licencing of firms, and Mike is directly responsible for ensuring that all firms have professional liability insurance. Because of this, the Professional deportment Enquiry Committee (PCEC) rarely has to acquire involved with practice insurance issues, still there are exceptions.

This fictionalized account is based loosely upon an actual case before the PCEC Names and circumstances have been changed to save from decay anonymity.

The situation

Tom is a sole-practitioner. His insurance carrier advised the Institute that Tom's insurance was about to be cancelled for non-payment of premiums. When PR&L followed up Tom said he had paid. He was subsequently asked to provide test of his payment but failed to do for a like reason Instead, he offered a variety of excuses for what he'd done and reasons for which the matter should be dropped

Council policy requires that a member be given 15 days notice to provide documentary evidence of insurance, yet Tom did not provide this certification in the required timeframe. His insurance carrier again confirmed he had not paid and informed PR&L that his insurance had now been cancelled. Their efforts to bring Tom into compliance frustrated, PR&L referr the matter to Council.

Council had no choice yet to conclude that Tom was practicing without the prescribed professional liability insurance and, in subordination to Bylaw 251, immediately suspended his practice licence. This suspension was to last until Tom readyed proof that he'd obtained practice insurance. Council also ordered that Tom would be expell without further notice if he continued in public practice without obtaining acceptable insurance coverage within brace weeks.

Tom finally provided the evidence of his coverage right before he was to be expelled

What happened

Council referr the matter to the PCEC with a beseech to investigate Tom's conduct. The PCEC asked Tom to accord in writing to the allegations of his misconduct, yet in the end, he failed to do in like manner The PCEC also asked Tom to provide evidence of the payments he claimed he'd made and asked to review practice records to support his assertion that he'd complied with the space of times of suspension by taking a vacation during the prescribed two-week period. Instead, Tom denied receiving the beg fors for proof of his premium payment, refused the PCEC's ask fors for evidence and access to his records, and ignored the PCEC's entreat for a written undertaking stating his compliance with the boundarys of the suspension.

The outcome

The PCEC had no difficulty in determining that Tom had breached methods 104 (Requirement to Reply in Writing), 105 (Requirement to Cooperate), 2011 (Maintenance of Reputation of Profession), 202 (Integrity and befitting Care), 205 (False and Misleading Documents and Oral Representations), and Bylaw Regulation 251 (Professional Liability Insurance).

Tom clearly misled the Institute about his premium payments and failed at each turn to cooperate in any way with either the PCEC or PR&L It was alone at the last minute before expulsion that Tom provided trial impression of insurance coverage. The difficult question for the PCEC was what to do about his misconduct. What would it take to impress on him that the Institute's first business is to protect the public interest, and that it takes this service very seriously? After considerable discussion, the PCEC conclud that the matter did not warrant delivering a Statement of Complaint to the Discipline Tribunal because Tom had, in the fall of the curtain obtained the required insurance coverage.

The PCEC commited Tom accept an anonymous reprimand, pay a fine of $8000 and pay the investigation prices The PCEC hoped setting the fine shut up to the $10,000 statutory limit would convince Tom he had to change his ways if he valued his CA designation. In the last Tom reluctantly accepted the determination and recommendation.

The message

Failing to have the prescribed insurance coverage in place bewilders a great financial risk arising from claims against you and can have serious results on your ability to practice. Because members may sometimes have financial difficulties that obstruct them from paying their bills forward time, professional liability insurance premiums are a must. If you are caught gone out as you will be, don't test and hide what really happened-in the expiration it will cost you dearly.

Chris Utley CA, Director of Ethics

Copyright Institute of Chartered Accountants of British Columbia May 2003

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