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IVA or Bankruptcy – Part 4

In the third article in this series, we looked at the possible effects of insolvency on the careers of members of the Armed Forces and of the Police.

In this fourth article we will look at the medical, dental, veterinary and pharmaceutical professions and the possible effects of insolvency on the careers of those engaged in those professions. It should be borne in mind that the Recognised Professional Body (RPB) governing any such professions will have its own rules and regulations in regard to a member becoming insolvent and these may be revised from time to time. Furthermore, the attitude of any particular RPB and its standard practice in dealing with an insolvent member may also vary somewhat depending on a number of factors.

It is not intended that this short article should be comprehensive in examining the effects of insolvency on the career of a professional. It is simply to illustrate the variety of mandatory and discretionary sanctions which an RPB may apply. In an ideal world the potentially insolvent professional could check directly with his or her RPB to determine such effects but many professionals would be understandably reluctant to do so, lest their questions alert their RPB to the situation prematurely.

A reputable Insolvency Practitioner (IP) could however elicit such detailed information from the RPB on behalf of a professional client on a confidential and anonymous basis, particularly when the client may be insolvent and is considering the merits and effects of two of the most frequently used financial remedies – Bankruptcy or Individual Voluntary Arrangement (IVA).

Some of the recognised professional bodies (RPB) governing the professions mentioned above are British Dental Association (BDA), General Dental Council (GDC), General Medical Council (GMC), Royal College of Veterinary Surgeons and Royal Pharmaceutical Society.

An insolvent member of an RPB, who is bankrupt or is in an IVA, will not necessarily be expelled from the relevant body nor indeed is it necessarily mandatory for an insolvent member to lose their licence to practice or other necessary accreditation. However, with the exception of BDA, the other RPBs listed above reserve discretionary powers of expulsion and loss of accreditation or licence in respect of a member in Bankruptcy or in an IVA.

Other sanctions which may be applied vary from body to body.

An insolvent member of GDC will be excluded if the insolvency reveals misconduct. Re-admission is possible. The BDA maintains a benevolent fund but it seems that GDC may not.

An insolvent member of GMC will be struck off if the insolvency reveals medical misconduct. Re-admission is possible and a member so struck off has a right to appeal the sanction. The GMC also maintains a benevolent fund.

An insolvent member of Royal College of Veterinary Surgeons will be struck off if the insolvent member’s conduct is fraudulent. Re-admission is possible. This body also maintains a benevolent fund.

Registration of an insolvent member of the Royal Pharmaceutical Society will not be affected unless supply of drugs is related to the insolvency. Re-admission is possible. This body also maintains a benevolent fund.

Anyone applying to join an RPB governing their profession should disclose significant issues relating to their financial status, particularly if insolvent or likely to become so.  Better to address such issues up front than to have to deal with them after joining the RPB as failure to disclose may incline the RPB to exercise its discretionary powers of sanction. Anyone who is already a member of an RPB when threatened with insolvency should familiarize themselves with the rules and regulations of the RPB and try to determine its attitude and standard practice in these matters.

If the RPB maintains a benevolent fund for members, an insolvent member could consider consulting with its trustees but before doing so should consider taking independent legal advice before making what could turn out to be a career threatening decision. A reputable insolvency practitioner will also provide invaluable advice on all the available options open to an insolvent professional. Such advice should be provided free of charge. Alternative sources of advice are CAB and the CCCS.

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