Exchange of correspondence between Humphrey LLoyd and Jack Pringle

Exchange of correspondence between Humphrey LLoyd and Jack Pringle (28/06/2005)

Letter from Humphrey LLoyd to Jack Pringle dated 7 June, in response to Jack Pringle's letter to Humphrey LLoyd dated 24 May.

Dear Jack,

I take up the invitation of your letter of 24 May 2005 to set out the position of ARB on Professional Indemnity Insurance.

First, as your letter recognises, all architects in practice must be covered by insurance which means a form of PII. That applies to members of the RIBA but there are very many architects who are not members of the RIBA and therefore not subject to its Code (which also accepts that architects are subject to the ARB Code). The ARB deals with all architects. It sees PII as essential to protect anybody who might be affected by the negligence of an architect, not just the client (as you say), but others who may have claims, so that both the public and, just as importantly, the profession, can have confidence that an architect in practice ought to be able to meet an obligation to pay compensation. Claims may be made long after the event which is why insurance has to be maintained against a claim when it is actually made.

As you know, with very few exceptions, all architects in practice on the Register have no difficulty telling us each year that they are covered. Of those that don’t tell us (on average about 200 or so), only a very small number actually refuse – about 0.005% of the 30,700 on the register. If it is thought that the reason is lack of cover then disciplinary proceedings may have to be taken.

In the most recent cases to reach the PCC the architects either admitted that they were in practice and had had no cover or the PCC found that they had had no cover. In every case the architect did not produce any policy to show that cover had existed. So the action taken by the ARB was justified. Architects were found to have been practising without insurance. Yet your letter suggests that, although practising architects must have insurance, the RIBA believes that no steps should be taken to root out those who do not have cover until the ARB gets a complaint of failure to act in accordance with the appropriate professional standard, i.e. when it turns out there was no cover. But by that time it is too late. The money is not there to pay any loss which may have been suffered. The horse has bolted.

You will recall the case of Brett Greatorex which came to the PCC in 2003. The architect had no PII to meet the claim against him so the Church for which he had been acting suffered a substantial loss. Is it really the RIBA’s view that the ARB should not try to stop a similar occurrence?

The ARB does not believe in waiting to shut the proverbial stable door. We believe that the interests of architects in practice, of the public, of the clients and others, and, above all, of the reputation of the profession itself, require the ARB to be proactive and to ask architects each year to declare simply and truthfully that they have cover and to investigate those who are unable to make such a statement to see if the reason is that there is no cover. If that is likely to be the case then charges may be brought for not having PII, but architects are not being charged with unprofessional conduct for not having made the statement required by Standard 8.

It seems that the only point of difference is whether Parliament, in legislating for the profession by way of the Architects Act, intended that the Board should not include in its Code a requirement that architects in practice should have PII. The belief that it did not is apparently based on the answer given in 1996 by a Minister, Mr Clappison, to the MP of an aggrieved couple who had been ruined by the failure of their architect to have PII cover for a negligent error – and who himself committed suicide, leaving a widow. His reasons why architects should not be required to have PII scarcely stand scrutiny. Furthermore, without looking at Hansard (Debates 5 June 1996) one might get the impression that this statement was made during a debate on the Act. It was not. At that date, the Act was in Committee.

If the Government had wished to implement Mr Clappison’s views by preventing the Board from having a policy on PII, then this could have been written into the Act; but Parliament did not. Statements made by Ministers are not relevant in deciding the meaning of Acts of Parliament unless the Act is ambiguous (which is not the case) and, as you know, the Board has taken the opinion of Queen’s Counsel on the matter. The ARB’s website summarises the advice that it received. Some Board members probably did not need legal advice. In this day and age the answer is obvious. If the RIBA does not agree then it had better get its own legal advice.

Furthermore, if that interpretation of the Act is not accepted, and if one were to take the Government’s interpretation as decisive, then, whatever its attitude in 1996, it is now satisfied with the Board’s position on, among other things, PII. In addition Malcolm Nickolls said last week in his letter to Building Design that he took part in all the discussions about the Act and that “Every word of the Act was agreed and accepted by both the ARCUK and the RIBA, with both organisations being fully aware of the meaning and consequences of the Act. Furthermore, both bodies had access to professional advisers to advise on any esoteric points.”

The ARB therefore considers that the Board has both the power under the Act and the approval and support of the Government in exercising that power.

The Board’s requirements as to the levels of cover are reviewed regularly. It is satisfied that the lowest level is currently the minimum necessary. Even if some architects could have a lower level for their current practice, policies have to cover claims when made. In addition the premium required for the minimum cover, according to what we are told by the RIBA’s agents, amongst others, should be affordable by an architect in practice.

I hope that this sets out the Board’s position clearly enough for you to understand and accept its position as rational and in the interests of the profession and the public. Your approach seems to be calculated to give priority to the interests of a handful of your members.

Yours sincerely,

Humphrey LLoyd

Chairman, ARB

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Letter from Jack Pringle to Humphrey LLoyd dated 24 May.

Dear Humphrey

There is growing concern in the profession about some of the ARB’s activities. The concern has come to a head with the ARB’s recent disciplinary proceedings in relation to Professional Indemnity Insurance (PII) and Standard 8 of the ARB Code. This complex but important issue is often mis-understood or mis-interpreted in public debate. I would like to make the RIBA’s position clear and to invite your response to this open letter, for the benefit of all architects.

The RIBA, like the ARB, is fully committed to serving the public interest. With regard to PII, the RIBA supports the provision of PII by architects’ practices to provide protection to the client from professional negligence. Guidance Note 5 of the RIBA’s Code of Professional Conduct states that insurance generally covering a Chartered Architect’s liabilities should be held; also that holding appropriate insurance cover is a requirement of an RIBA Registered Practice, and that professional work is to be protected at a level of cover commensurate with the projects undertaken.

In 1996 when Parliament determined the powers to be given to the newly created ARB, it was made expressly clear that the Act was not being passed to enable the new Board to become actively involved in compulsory professional indemnity insurance. The RIBA has accepted that the ARB can usefully issue guidance to registrants on this matter after ascertaining what levels of insurance are normally prevailing or generally reasonable. However, the RIBA does not accept that the ARB can convert such guidance into prescriptive requirements with which architects must comply under threat of penal sanction regardless of the nature of their practice.

The RIBA has regularly informed the ARB of its concerns about the ARB’s PII requirements and other issues. For example, in the report to the RIBA Council of the ARB Review Task Group in September 2004 which was sent to the ARB.

The defect of Standard 8 of the ARB Code, as amended in November 2001, is not only that it prescribes minimum levels of PII, but that it further asserts the right of the ARB to require those on its register to submit a certificate in evidence of compliance. The ARB is now requiring certificates annually and has threatened those who refuse with disciplinary proceedings. Furthermore, the ARB’s own publicity for its Professional Conduct Committee’s recent decisions is evidently meant to show architects that the refusal to provide a compliance certificate is considered by ARB to be “unacceptable professional conduct”, attracting punitive fines and/or erasure from the ARB Register. I quote from your web site:

“The message sent by the PCC to the Board about PII cases is noted, namely that non-compliance with the Board’s PII requirements is a serious breach of the Code and should in future result in an architect facing a rapid PCC referral.”

These cases, which included a charge for non-production of a PII compliance certificate, involved no client or public complaint, or any evidence of professional misconduct or negligence.

Before the revision of Standard 8 in November 2001, in the consultation stage, the RIBA questioned the legal validity of what was proposed. In answer, the ARB claimed that the proposal was supported by legal advice, but refused to openly disclose that advice. When, later, the extent of the ARB’s remit was questioned by a newly elected ARB Board member, the ARB again claimed to justify its position by reference to fresh legal advice which it has also declined to publish. The RIBA can only draw the conclusion from this that the ARB’s advice may not stand scrutiny.

The RIBA believes that the ARB has ignored reassurances given to the profession in Parliament and unreasonably maintains that lack of evidence of PII cover warrants a charge of professional misconduct. If there is justification for the ARB’s position, then please state it openly to the profession.

Yours sincerely

Jack Pringle

Chair RIBA Professional Services Committee & Chair of RIBA’s ARB Working Party