Steve Thomas, Insolvency Partner recently successfully acted for a dentist who was disqualified as acting as a director but who then came under the gaze of the General Dental Council (“GDC”) who had to consider whether that disqualification as a director is sufficient evidence on its own to amount to a breach of the GDC’s Standards. After receiving representation form Steve Thomas no further sanctions were imposed on the Dentist and the Dentist could continue to practice unconditionally.
The GDC had to determine, amongst other things, whether a Disqualification Order/Undertaking would give rise to a concern that harm had been caused to a member of the public, or that public confidence in the profession has or may be undermined.
The sanction which the Dentist was facing was the taking away of his licence to practice, so profoundly serious and perhaps not immediately appreciative of the fact that being disqualified to act as a director could affect your career and bring you into the spotlight of your regulatory bodies.
Steve was asked to represent a Dentist facing an investigation into his business affairs which led to the Dentist entering into an Undertaking not to act as a Director for 8 years.
The interesting fact of this case is that the Company which the Dentist was a director of was not associated with in any way to his practice as a Dentist and was a separate business interest which failed and entered in to a creditors voluntary Liquidation.
The case also brings sharply into focus the effect of giving an Undertaking and whether it amounts to an admission or acceptance of the allegations made and if so or if not whether they can be relied upon in proceedings brought by your regulatory body.
Many may recall, in not the too distant past, that measures were introduced by the Government during 2020 to support businesses affected by COVID19 such as loans, grants, and tax allowances. The Bounce Back loan (BBL) scheme helped small and medium-sized businesses to borrow between £2,000 and £50,000, at a low interest rate, guaranteed by the Government in the event of nonpayment by the Company. The Bounce Back loans were usually made on the condition that they were not to be used for personal purposes but must be used for the Company and essentially provide an economic benefit to the business.
The Government website on BBL’s makes it clear that if there was any misconduct in the use of the loan, action could be taken against a company or its directors. Examples of this misconduct included providing false information on the loan application, using the loan for personal benefits, and dissolving a company to avoid paying the debt. The website also makes it clear that disqualification as a director is one of the sanctions that could occur for any misconduct.
The present case concerned a Company which obtained a BBL and entered Liquidation and did not repay the BBL.
The Insolvency Service decided to issue proceedings against the Director to disqualify him for essentially breaching one or more of the conditions of applying for a BBL.
In response and after negotiation an Undertaking for 8 years was entered in to.
Shortly thereafter, the GDC investigated the matter and had to decide whether the giving of such an Undertaking would affect and should be taken in to account when deciding if the dentist should be licensed to practice “the fitness to practice test.”
The dentist was pleased to note that the GDC agreed that the disqualification fell outside the business of dentistry and the Insolvency Service had investigated the conduct and whilst an Undertaking had been given no judicial determination had taken place and therefore no finding of malpractice or misfeasance.
However, what is clear that any allegations of alleged BBL fraud were allegations which the GDC had the remit to investigate under the statutory ground of misconduct and could have amounted to an allegation of impaired fitness to practise.
This is a remarkably interesting development and one of concern for all professionals who have separate business interest not connected with their qualification or profession, for instance as a dentist, doctor, solicitor or barrister etc.
Most regulatory bodies have the fitness to practice test, in some form or another , and therefore it is clearly conceivable that any professional who is disqualified can come under investigation by their regulatory body and therefore advice will need to be taken very early in any threatened proceedings especially if an Undertaking is being considered and most importantly the terms of the schedule which is attached to the Undertaking which sets out a statement of agreed facts though it is contended that this does not amount to an admission or acceptance of the same.
Therefore, the agreed wording of the schedule is of utmost importance and all or any concessions made in the negotiations leading up to the giving of an Undertaking.
We are of the opinion that the GDC came to the right conclusion in the present case and generally that to look in to the reasons why a person was disqualified especially when an undertaking was voluntary given is outside the remit of GDC and there is a competent body known as the Insolvency Service who can investigate those matters.
