Professional Conduct Committee Decisions

ARCHITECTS REGISTRATION BOARD

PROFESSIONAL CONDUCT COMMITTEE

IN THE MATTER OF

MR MICHAEL JRC PHILLIPS (049354F)

19 April 2011

Architects Registration Board
8 Weymouth Street
London
W1W 5BU

Present:

MR PAUL HOUSEGO (PCC CHAIRMAN)
MRS LINDA READ (PCC MEMBER)
MRS JUDITH CARR (PCC MEMBER)

MS NICOLA HILL appeared as Clerk to the Committee

MR IAIN MILLER appeared on behalf of the Board

MR PHILLIPS attended but was not represented

THE CHAIRMAN: At today’s hearing, the Board was represented by Mr Iain Miller, of Bevan Brittan. Mr Michael Phillips attended but was not represented. Mr Phillips faced allegations as follows:

That he was guilty of unacceptable professional conduct/serious professional incompetence in one or more of the following respects:
1. contrary to Standard 11.1 of the Architects Code of Conduct (2002), he failed to inform the complainant or his wife in writing of the provision for termination, provisions for dispute resolution, and that he was, as an architect, subject to the disciplinary sanction of the Board;
2. contrary to Standard 11.3, he failed to ensure that his practice had appropriate and effective internal procedures, including monitoring and review procedures;
3. contrary to Standard 11.5, failed to keep the Complainants informed of the progress of work undertaken on their behalf and of any issue which may have significantly affected its quality or cost;
4. contrary to Standard 12; failed to handle the Complainants or their legal representative’s complaint appropriately.

Mr Phillips’ firm and he personallywere responsible for a refurbishment project of a house in Lymington owned by Mr and Mrs Riklin.

Mr Phillips’ Terms of Engagement are agreed to be inadequate as while there is a fee scale by time expended, there was no provision for termination of the retainer, and no statement that his practice was regulated by the ARB. There were no provisions for dispute resolution. Allegation 1 has been admitted and proved.

Bills were to be rendered monthly, but were not over a two year period. This was accidental, not intentional. When Mr Phillips found this out he told his clients his bill would be approximately £125,000 plus VAT. This led to the relationship being ended by Mr Phillips in March 2009 who took exception to his clients’ offer of £10,000 and walked out of discussions when an offer of £20,000 was made. Mr Phillips later did offer to accept £60,000 to settle, which was refused by the Complainants.

Allegations 2 and 3 are admitted and proved.Plainly a one off charge of £125,000 for two years work is far different from monthly invoices.
On 10 March 2009 Mr Phillips told the clients he had sold the debt to a factoring company:

‘With regard to this and, following on from the third party appraisal and follow-up discussions I am issuing the debt position to three factoring companies, along with a full copy of the project dossier. I mentioned to you the financial position that your failure to reconcile our fees has placed me in and, I am regrettably forced to take the highest bidder out of the three to allow them then to pursue recovery of the money using whatever means and methods they determine.’

Mr Phillips had not then raised an invoice, which he did on 26 May 2009; for £126,601.25 plus VAT and expenses, totalling £147,387.04.

The first contact from what was in fact a debt collection agency was on 18 May 2009 which can be referenced in Mrs Riklin’s affidavit.

Mr Phillips’ letter to his clients solicitor dated 4 June 2009 said that he would not correspond with them as he had sold the debt to a debt collection agency:

‘The matter now rests with a registered debt-collection agency, as warned by me in my email to your client of 10 March 2009 and any further communications should be with them. You are at liberty to ascertain just who they are and by any and all means that you have at your disposal. My company will not be delivering this or any other information to you from this point forward.’

Mr Phillips told us that with his knowledge the debt collection agency had subcontracted this debt to another agency, of whose actions and methods he did not know. Whether or not this was so, they were highly intimidating, including veiled threats of violence, and the pouring of acid over the Riklin’s Maserati car. This led to the clients obtaining an injunction to restrain Mr Phillips which was issued on 16 June 2009.This was despite solicitors for the clients’ objections to threats being made, and saying this would be reported to the police in their letters of 28 May 2009 and 3 June 2009 where an injunction was threatened. Mr Phillips’ response to these letters was sent on 4 June 2009. While Mr Phillips tells us that he did not know of the exact nature of the threats, which were not specified by the Solicitors, and we accept this, he did know that it was alleged that threats were being made and made no effort to find out what was in fact occurring or to stop them.

The genesis of allegation 4 is the first 3. The fact that terms were not properly set out, and invoices were not rendered meant a situation arose where there was a lot of unbilled time. The first 3 allegations are matters that on their own would not be likely to involve any substantial penalty. They are nevertheless unacceptable professional conduct.

When Mr Phillips raised this with the clients his actions and reactions were highly inappropriate. This was very serious unacceptable professional conduct.

The matter of fees due of £125,000 was presented to the clients by Mr Phillips without acceptance by him that this was caused by errors - mainly not rendering invoices - for which Mr Phillips was responsible.

Mr Phillips terminated his retainer part way through the project because fees were not paid, when there had been no invoice, and it was Mr Phillips who terminated the discussion.

Mr Phillips then falsely stated that he had sold the debt to a factor when he had not; he refused to say who the agency collecting the debt was; he declined to engage in further discussion with the client or their solicitor, and he wrote to say the agency would use whatever means they felt appropriate. When Mr Phillips was told about the threats, he replied to say that he had advised and warned the client about his likely actions.

Mr Phillips’ own correspondence is intimidating and unprofessional; without Mr Phillips’ plea in mitigation we would have erased him from the Register. We are not going to do so because of the factors set out by Mr Phillips which include:

The clients must have known substantial fees were being incurred and said nothing.They appear not to have engaged in meaningful discussion about the likely level of fee they might negotiate, and we note from Mr Phillips’ evidence that a claim for his fees was 45% successful, so not far short of the £60,000 he said he would settle for.

That this case has led to the destruction of Mr Phillips’ reputation.

That his personal circumstances are totally changed with the demise of his practice and financial ruin; and most importantly Mr Phillips fully accepts that what he did was very wrong, and he is apologetic and contrite.

We give full weight to the crushing business and personal problems besetting him at the time, and we accept Mr Phillips’ own assessment of the position that his judgment at the time was severely impaired. This is a sole lapse in a lengthy career. We considered that the need to maintain the reputation of the profession requires a severe sanction to be imposed. But we do not think that justice is served by a disciplinary order that precludes Mr Phillips from re-establishing himself as we hope he will.

Accordingly our disciplinary order is that Mr Phillips is suspended for 4 months from today, and his name will be removed from the Register for that period.

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