High Court finds professional disciplinary process to be unlawful

In Captain Arshad Rashid v Oil Companies International Marine Forum [2019] EWHC 2239, the High Court criticised a voluntary association for unlawfully removing the accreditation of one of its inspectors, finding its disciplinary process to be inconsistent with the requirements of procedural fairness and in breach of contract.

Key Points

• In the context of disciplinary processes conducted by voluntary and professional associations, an obligation to afford procedural fairness may arise either as a matter of contract law or public law.
• Procedural fairness requires that a person adversely affected by a decision be provided with an opportunity to be heard and sufficient notice of the matters under consideration by the decision-maker.
• In the circumstances of this case, a denial of procedural fairness arose from numerous flaws in the disciplinary committee's process. The committee failed to honour an assurance that certain serious allegations previously raised with the claimant would not form part of its hearing process. Further, fresh allegations which had not previously been raised with the claimant or his lawyers were raised at the hearing and formed the basis of its final decision.

Background

The Oil Companies International Marine Forum ("OCIMF") is a voluntary association of oil companies whose mission is to increase standards in safety and environmental responsibility in the shipping industry. In order to further this mission, OCIMF operates a ship inspection report ("SIRE") programme and database which is based on inspection reports carried out by OCIMF-accredited ship inspectors.

The claimant in the case, Captain Arshad Rashid, undertook the necessary training and examinations through OCIMF and became an accredited SIRE inspector in February 2006.

OCIMF reserves the right to review the accreditation of its inspectors. Captain Rashid was informed by OCIMF that it had opened an inquiry regarding his conduct due to certain anomalies in his SIRE inspection schedule. The inquiry was to consider four allegations against Rashid: coercion of crew to falsify log entries relevant to his inspection; misrepresentation of the time spent on board vessels conducting inspections; providing instruction to trainee inspectors on how to falsify SIRE reports; and failure to follow guidelines when accompanied by trainee inspectors. Captain Rashid was then informed that a forthcoming disciplinary hearing would consider the allegation regarding the time spent on board vessels. The effect of this communication was that the more serious allegations of coercion of a crew member, corruption of a trainee, and failing to follow the guidance on accompanied inspections, were not being pursued.

At the disciplinary hearing, the OCIMF committee (the "Committee") had before it the full OCIMF investigation report containing the more serious allegations. The Committee also raised a number of new factual concerns which had not previously been raised with Captain Rashid and which he was unaware would be the subject of the hearing. The Committee proceeded to recommend that Captain Rashid should have his accreditation permanently withdrawn, relying on these new matters as grounds for its recommendation.

Captain Rashid sought unsuccessfully to appeal the Committee's recommendation through OCIMF's internal appeals process. He then commenced proceedings against OCIMF in the High Court on the basis of breach of contract and / or principles of natural justice, alleging a denial of procedural fairness arising from the Committee imposing a sanction which was based on a consideration of matters outside the scope of its inquiry.

Decision

The Court considered, firstly, the source of law governing its decision-making process against Captain Rashid. The Court accepted that a contract existed between OCIMF and its inspectors, arising from the inspectors' submission to the rules and in OCIMF's agreement to operate the rules and permit the inspector to carry out inspections in accordance with them. An obligation of procedural fairness existed as a matter of contract law. In any event, an obligation for OCIMF to afford procedural fairness when disciplining its inspectors arose as a matter of public law.

The Court then considered the content of the Committee's obligation to afford procedural fairness in the particular circumstances of this decision. A central tenet of procedural fairness is ensuring that a person adversely affected by a decision is provided with a reasonable opportunity to be heard; this entails that the person be provided sufficient notice of the allegations against him or her.

The allegations against Captain Rashid during the hearing were wider in scope than the one allegation he was informed would be the focus of the hearing. Captain Rashid was questioned about the standard of his reports, the number of inspections he carried out per year and the extent of rest periods during and between inspections. He had not been previously informed of these allegations. Each of the matters which formed the basis of the decision of the Committee could and would have been addressed in advance by Captain Rashid's lawyers with decisive answers, had he been informed of the allegations against him.

The Court concluded that the Committee went beyond the appropriate scope of the inquiry in relation to both the questioning and the reasons for its decision, and that Captain Rashid was not given sufficient notice of the nature of the matters which formed the focus of the decision to remove his accreditation.

It was held that the handling of both the investigation and disciplinary hearing was deeply flawed, wholly unfair on the Captain and a serious breach of the principles of fairness and natural justice. Captain Rashid was awarded a declaration reinstating his accreditation and damages in the sum of £127,000 for loss of income.

Comment

A disciplinary body, such as the OCIMF Committee, may owe obligations to members who are the subject of investigations, both as a matter of contract law and public law.

There is no obligation on a disciplinary body to follow formal procedures akin to a court but it must comply with the common law rules of natural justice. The obligations of procedural fairness are "flexible and fact specific in their application", depending on a range of factors including the nature of the decision, the rights affected, and the overall decision-making procedure. Fundamentally, fairness requires that a person adversely affected have an opportunity to be heard and to know the allegations they have to meet.