Skip to content
Procura

Disciplinary Panel Hearings

4 SET 2008

Mr H Etches - 3 September 2008

Case of
Mr H Etches [0047219] and Howard Etches/Harwood Projects Limited Epsom, Surrey

on

03 September 2008

at
RICS, Parliament Square, London, UK

Charges

The formal charges are that: 

  1. Contrary to Rule 3 of the Rules of Conduct for Members 2007 you have not acted at all times to avoid situations that are inconsistent with your professional obligations in that since January 2007 you have provided surveying services to the public without having professional indemnity insurance cover with respect to your sole practice under the style of Howard Etches.
  2. Contrary to Rule 5 of the Rules of Conduct for Members 2007 you have not carried out your professional work with proper regard for standards of service and customer care expected of you in that you have failed to comply with a request made on 24 October 2007 by your client Ms J A Lesser for a copy of your complaints handling procedure.
  3. Contrary to Rule 7 of the Rules of Conduct for Members 2007 you failed to ensure that your personal finances were managed appropriately in that you entered into an Individual Voluntary Arrangement with creditors in February 2008.
  4. Contrary to Rule 7 of the Rules of Conduct for Members 2007 you failed to ensure that your professional finances were managed appropriately in that Harwood Projects Ltd of which you were a Director was made subject to a compulsory winding up order on 19 February 2008.
  5. Contrary to Rule 9 of the Rules of Conduct for Members 2007 you have failed to co-operate fully with RICS staff in that you have not responded to letters dated 6 December 2007, 29 January 2008, 29 February 2008, 11 March 2008, and 28 April 2008.
  6. Contrary to Rule 3 of the Transitional Rules for Registration of Firms 2007 you being a principal of the firm Howard Etches which provided surveying services to the public and of which at least fifty per cent of the principals are members of RICS, you failed to register the firm for regulation by RICS.
  7. Contrary to Rule 3 of the Transitional Rules for Registration of Firms 2007 you being a director of the firm Harwood Projects Ltd which provided surveying services to the public and of which at least fifty per cent of the principals were members of RICS, you failed to register the firm for regulation by RICS.

Determination

Findings and Reasons

The Panel have considered whether the hearing today should go ahead in the absence of Mr Etches.

The Panel is satisfied that notification of the hearing has been properly given under Rule 23 and properly served under Rule 3.

The Panel has taken into account the listing questionnaire which whilst unsigned and undated was returned with Mr Etches letter of 26 August 2008.

The Panel do take into account his letter and also the note of his telephone conversation with an employee of this Institution on 18 August 2008 which encouraged a written response from Mr Etches.

The Panel took into account that Mr Etches says in his letter that he does not feel competent to attend because of his medication.  However, there is no medical evidence from Mr Etches to support this and nothing from his doctor to indicate that he is unfit to attend.

The Panel has taken into account Mr Etches behaviour during the course of this investigation.  He has persistently not engaged with the process since late 2007 and prior to that any engagement was sporadic.

Mr Etches has not specifically requested an adjournment and in the listing questionnaire he indicates that he will not attend, be represented and has no further papers.  From his letter and his previous behaviour pattern the Panel concluded that he has voluntarily absented himself from these proceedings.

Since receipt of his letter of 26 August 2008 the Institution has written again to him and indicated to him the proceedings may go ahead.

The Panel has taken into account the possibility of reaching the wrong conclusion but notes that it appears that all the evidence is contained in the Panels bundle.  The Panel has also concluded that in view of the seriousness of the charge it is in the public interest to proceed.

Findings with Reasons

Mr Howard Etches is alleged to have committed five breaches of the Rules of Conduct for Members 2007 and two breaches of the Transitional Rules for Registration of Firms 2007.  He has not attended this hearing and is not represented.

The Panel considered each of the alleged breaches of the Rules in turn as follows:

  1. In relation to alleged breach 1 the Panel finds that Mr Etches provided surveying services to the public without having professional indemnity insurance cover with respect to his sole practice under the style of Howard Etches since January 2007.  Mr Etches did have insurance up until 15 January 2007 which is shown at page 3 of the bundle.  At page 12 of the bundle Mr Etches indicates in his letter dated 21 March 2007 that he does not have any details of professional insurance for Howard Etches at that date but would get them as soon as he could.  There was then no further communication from Mr Etches about this matter until a letter dated 3 January 2008 which is found at page 40 of the bundle.  In this letter he admits that he was finding it very difficult to obtain professional indemnity cover for Howard Etches.  There is no further communication from Mr Etches about this. 

    The Panel on balance therefore finds that the facts relating to this breach have been proved. Rule 3 of the Rules of Conduct for Members 2007 (“the Rules”) state that members should avoid any actions that are inconsistent with their professional obligations.  The Panel finds that the failure to have suitable professional indemnity insurance is inconsistent with Mr Etches professional obligations because insurance offers protection to the public against members’ professional failures.  The Panel finds this breach proved.
  2. In relation to alleged breach 2 the Panel finds as a fact that Mr Etches failed to comply with a request made on 24 October 2007 by his client for a copy of his complaints handling procedure.  The client made a complaint to the Institution by a letter dated 10 August 2007 which is found at page 18 of the bundle about the service that she had received from Mr Etches.  The nature of the complaint is found at pages 19 to 22 of the bundle.  The Institution responded to her complaint by a letter dated 7 September 2007 which is found at page 23 and 24 of the bundle.  In page one of the letter, the Institution explains that firms should have a complaints handling procedure and that she should request a copy of this.  It can be seen from the evidence before the Panel that the Client took this to mean that Mr Etches himself should have a complaints handling procedure and she therefore wrote to him, not the firm, on 24 October 2007 (page 28 of the bundle) requesting a copy of his complaints handling procedure by return of post. 

    The Institution also requested from Mr Etches on a number of occasions a copy of his the complaints handling procedure and confirmation that it had been provided to the Client.   Although there is a letter from Mr Etches at page 43 of the bundle dated 29 January 2007 but received on 2 January 2008 saying that he will be responding to the earlier letters no response has been forthcoming to either the Institution or the Client.  There is a note of a telephone conversation confirming this on page 66 of the bundle.  The Panel finds that Mr Etches’ failure to comply with the clients’ request is a breach of Rule 5 in that he failed to have proper regard to the standards of service and customer care expected of a member.  This is because all members of the Institution should respond promptly and fully to requests made by clients, particularly where a member of the public has made a complaint.
  3. In relation to alleged breach 3 the Panel finds Mr Etches entered into an individual voluntary arrangement with creditors in February 2008.  There is clear evidence of this in the correspondence from the Insolvency Practitioners Frost Debt Solutions, the County Court documents and the entries from the Individual Insolvency Register (pages 35, 51 to 56 and 61 to 62 of the bundle).

    The Panel is satisfied that on the particular facts of this case Mr Etches has failed to ensure that his personal finances were managed appropriately and has therefore breached Rule 7.  While entering into an IVA may not in every case be inappropriate there is evidence in the bundle that Mr Etches had a wide range of debts, including utilities, tax, council tax, mortgage arrears, several credit cards and mobile phone.  Not only does this show that there were a large number of debts but also that they were in every area of his life.  From page 39 of the bundle the schedule shows that many these debts had been unsatisfied for a long time as they had been passed to collection agencies and bankruptcy teams.
  4. In relation to alleged breach 4 the Panel finds proved that Mr Etches failed to ensure that his professional finances were managed appropriately in that Harwood Projects Limited of which he was a director was made subject to a compulsory winding up order on 19 February 2008.  This is evidenced by documentation from the Insolvency Service and High Court documents at pages 77 to 83 of the bundle.  The fact that Mr Etches was a director is evidenced by the information from Companies House found at pages 84 to 94 of the bundle.

    Allowing a company of which a member is a fifty percent shareholder and director to go into compulsory liquidation is a breach of Rule 7.  There is an expectation that a member trading through a company of which he has effective control will ensure that the company finances are managed in such a way as not to put its creditors at risk and it will be solvent whilst trading.
  5. In relation to alleged breach 5 the Panel finds that Mr Etches has not responded to letters from the Institution dated 6 December 2007, 29 January 2008, 29 February 2008, 11 March 2008 and 28 April 2008.  Although he indicated at page 43 of the bundle that he would respond in January 2008 he failed to do so.  He also admits in his letter to the Institution date 26 August 2008 that he failed to respond to RICS correspondence.

    Rule 9 says that members should cooperate fully with the Institutions’ staff.  Mr Etches’ failure to properly respond to letters and in some cases respond at all is a breach of the rule.
  6. In relation to the alleged breaches 6 and 7  the Panel finds that Mr Etches failed to register as principal of the firm Howard Etches and to register the firm Harwood Projects Limited of which he was a director and of which at least 50% of the principals were members.  Both firms were providing surveying services to the public.  Evidence of this failure can be found at pages 29, 71 and 72 of the bundle.

    Rule 3 of the Transitional Rules for Registration of Firms 2007 requires firms to register with the Institution if they are providing a surveying service to the public in the UK and at least 50% of their principals are members of the Institution.  Mr Etches breached this requirement by his failure to register either of the firms.

 The Panel finds Mr Etches is liable to disciplinary action in relation to each of the above breaches both individually and cumulatively.  Mr Etches’ conduct in respect of each breach is liable to bring the Institution into disrepute because of the disregard of several of his obligations as a member of the profession.  Further Mr Etches failed to adhere to by-laws and regulations governing members conduct.

Determination on Penalty                                                 

The Panel considered the RICS Sanctions Policy in reaching its conclusion as to the appropriate penalty in this case.

The Panel considered that the breaches found were very serious.  The Panel find that there were a number of aggravating factors in this case.  There was a risk of loss to any of Mr Etches’ clients because he was trading and undertaking surveying services whilst not carrying professional indemnity insurance.  He is an experienced surveyor and a fellow of the Institution, he therefore has no excuse of inexperience or naivety.  The Panel was also told that Mr Etches has a disciplinary history which included failure to have professional indemnity insurance, failure to supply a complaints handling procedure and failure to co-operate with the Institution.  The Panel has also taken into account the number of breaches and that the failure to have professional indemnity insurance persisted this time over a considerable length of time during which Mr Etches was still practising.

The Panel noted that Mr Etches has at no point expressed any regret for his actions.  It is also somewhat unfortunate that Mr Etches has taken few if any steps to rectify the breaches.  Mr Etches has also failed singularly to cooperate with the Institution.  

The Panel has considered whether there are any mitigating factors in this case.  The Panel noted that in his letter of 26 August 2008 he informed the Institution that he was under medication and that he has felt under unbearable pressure for the last two years.  It also noted that Mr Etches’ Insolvency Practitioner did inform the Institution of his impending IVA.  He also tells us that there is some run off cover for Harwood Projects Limited.  However the Panel noted that he did not himself tell the Institution that his company was going into compulsory liquidation which is a grave inconsistency. 

In relation to all the breaches the Panel has concluded that a caution, reprimand, undertaking or condition on membership would not be appropriate in this case due to the seriousness of the breaches. These sanctions would not adequately demonstrate that the Panel takes firm action in order to protect the public interest and promote regulatory compliance.  Nor would they sufficiently deter Mr Etches or other members or firms from future non-compliance.  Given Mr Etches’ history of failure to enter into undertakings and his repeated breaches of the Institution’s regulations the Panel did not think he could be relied upon to comply with undertakings or conditions.

The Panel is mindful of the fact that Mr Etches has had some financial difficulties and the effect which a fine might have upon him.  However it has also to take into account the need to impose proper sanctions that deter both Mr Etches and other member of the Institution from future breaches and reassures members of the public that the Disciplinary Panel takes these types of breaches seriously.  The panel considers that the sanctions set out below are proportionate given the circumstances.

In relation to the first breach, the Panel imposes a fine of £2,500 and expulsion from membership of the Institution.  This is not the first time that Mr Etches has failed to have professional indemnity insurance and therefore shows that he has not learnt from his previous appearances before the Professional Conduct Panel in 2005 and a Disciplinary Board in 2006.  A fine is particularly appropriate because Mr Etches had benefited financially from this breach by avoiding payment of insurance premiums.

In relation to the second breach, the Panel imposes a fine of £1500 and expulsion from membership of the Institution.  This is not the first time that he has faced disciplinary action in relation to a failure to supply a complaints handling procedure.  The sanctions imposed at previous Disciplinary Hearings do not appear to have had the desired deterrent effect.  In addition the Panel took into account the detrimental effect on the client of his failure to provide any information in response to her complaint despite promises to do so.

In relation to the third breach, the Panel imposes a fine of £500 and expulsion from membership of the Institution. Although there is a degree of mitigation in relation to this particular breach in that the Institution was informed of the impending IVA, the fact of his personal insolvency represents incompetence in the management of his personal affairs that would not be expected in a member of the Institution and undermines public confidence.

In relation to the fourth breach, the Panel imposes a fine of £1500 and expulsion from membership of the Institution.    There was a risk to Mr Etches clients because he managed his company affairs in a manner that fell short of the standards that the public could reasonably expect from a competent professional.

In relation to the fifth breach, the Panel imposes a fine of £1500 and expulsion from membership of the Institution.  A self regulatory system relies on members willingly cooperating with the Institution whenever it is required.  Mr Etches blatantly ignored this obligation.

In relation to the sixth and seventh breach the Panel imposes a fine of £2500 for each breach and expulsion from membership of the Institution.  The success of the Institution’s new regime is entirely dependent on the timely and proper registration of firms where required in order to properly regulate the profession and protect the public interest.  The level of the fine imposed reflects how seriously the Panel regards Mr Etches’ disregard of the importance of registration.

Determination on Publication and Costs:

In relation to costs the Panel make an order for costs in the sum of £6,714.00.  Although Mr Etches may have some financial difficulties the Panel took into account the fact that expulsion from membership of the Institution does not prevent him from earning a living.

This decision will take effect immediately.

This decision shall be published in accordance with the Regulatory Board’s Publication Policy.

Mr Etches has a right to appeal this decision within 28 days in accordance with the Disciplinary, Registration and Appeal Panel Rules 2008.