THE ARCHITECTS REGISTRATION BOARD

PROFESSIONAL CONDUCT COMMITTEE

In the matter of

MRS LAURA PETRUSO (064974K)

Held as a video conference

   On

29 November – 1 December 2021

———-

Present

Andrew Webster QC (Chair)

David Kann (PCC Architect Member)

Martin Pike (PCC Lay Member)

———–

In this case, the ARB is represented by Mr Greg Foxsmith of Kingsley Napley LLP.

Mrs Laura Petruso has attended this hearing but is not legally represented.

Allegation

1. The charge against the Ms Laura Petruso (“the Respondent”) is that she is guilty of unacceptable professional conduct (“UPC”).
2. The particulars alleged in support of the charge are:

1) The Respondent received a payment for the introduction and/or referral of work which was not disclosed to her client;

2) The Respondent’s actions at particular 1 lacked integrity and/or were dishonest.

Background

3. The charge comes before the Committee further to its jurisdiction under the Architects Act 1997, sections 14(3) and 15(1)(a) to determine whether an architect is guilty of UPC; and if so, to determine whether a disciplinary order ought to made in consequence thereof; and if so, what order should be imposed.

4. The Respondent is a registered architect. She is the owner and director of Alpex Architecture Limited. In or around 2017 she provided professional services to a dental practice, CGDP, (“the Practice”) in connection with the extension of the practice premises. The proposed building work was put out for quotes. Three quotes were received, including one from B, a company of builders (“B”). B submitted revised quotes. The Respondent advised the Practice in relation to the quotes. B’s ultimate bid was successful. Work commenced on site. Relations between the Practice and B broke down. The contract for works was terminated. Relations between the Practice and the Respondent also broke down and the contract with the Respondent was also terminated.

5. During the breakdown in relationships a concern arose over an allegation that the Respondent, unknown to the Practice, had obtained a referral fee from B as a consequence of B securing the building work.

Admissions

6. Further to rule 18 of the Rules, the Respondent having been invited to admit any the facts contained within the report before the Committee, declined to do so. 

Response to allegation

7. The Respondent pled not guilty to the charge of UPC.

Evidence heard

8. The Committee heard evidence from A (“the Complainant”) who is a director of the company that carried on business as the Practice; P, previously director of B; the Respondent; and C, a builder and sometime business partner of the Respondent.

Findings of fact 

9. In reaching its decisions the Committee has carefully considered the submissions of the parties, together with the evidence presented to it, both in documentary form and the oral evidence of A, P, the Respondent and C.

10. The Committee also had regard to the advice of the Legally Qualified Chair that on disputed issues of fact, the onus of proof was on ARB and that the standard of proof was the civil standard of the balance of probabilities. In determining any facts, the Committee is to consider the evidence in the round and is entitled to draw reasonable inferences from established facts but is not to speculate. 

11. The findings of fact of the Committee are:

Particular 1: FOUND PROVED.

12. P’s evidence was that they had been asked by the Respondent for a 5% referral fee were they to win any bids for jobs with the Respondent; and that B had ultimately paid £15,000 to the Respondent as a referral fee for the work undertaken at the Practice. The Respondent denied any such request was made.  She denied that any referral fee had been paid. She submitted that payments made to her by P were in respect of materials purchased by her for clients.

13. The Committee found P’s evidence on these key matters credible and reliable and preferred that evidence over the evidence of the Respondent, which it found to be inconsistent and not credible.

14. In doing so the Committee notes that P’s written, and oral evidence was consistent with a text message sent by the Respondent to P on 17 May 2017 in which the Respondent said “Hi [P] sorry to bother but have you managed to finish [CG] cost plan? If yes can you please include an extra 5% for my referral and send me the cost with the covering letter?  Thank you, Laura”.

15. The Committee considered the Respondent’s evidence that this text message was not genuine. She denied that she had sent the text message in the terms presented to the Committee.  In her witness statement she drew the Committee’s attention to a difference between the date when P downloaded the text message from their telephone, 12 April 2018 at 01:23, and the date of creation of the PDF in which the text messages were presented to the Committee, 13 April 2018 at 22:33.  Under reference to observations she had received from an unidentified “forensic expert”, she raised the possibility (at the least) that the original text had been amended.  In her oral evidence the Respondent stated that the text had been amended in respect of two words, in that “[CG]” had been substituted for “[TS]”, a reference to another project which she and P had been working on. 

16. However, no forensic evidence was placed before the Committee that there had indeed been an amendment to the text; and other than the Respondent’s assertion, there was no evidence before the Committee that such a change had been made. The Committee determines that the Respondent’s assertion that there has been an amendment of the text message is speculative.

17. Further, the Committee notes that the Respondent’s evidence was that it was not her practise to ask for any inducement or referral fee. Against that evidence, the Committee found the Respondent’s position that the text message originally referred to seeking a referral fee for work proposed at [TS], to be inconsistent with her claimed practice. In reaching that view the Committee also notes that the text referred to “an extra 5% for my referral” [emphasis added]. The Respondent said in her evidence that this was a fee for another project but did not suggest in her evidence that the highlighted words had also been fabricated. The Committee determines that the reference to referral is specific and qualifies the nature of the request that was being made, and that the project was for the Practice, as stated in the text. The Committee therefore finds the Respondent’s evidence to be inconsistent and not credible.

18. Preferring P’s evidence over the Respondent’s for the reasons given, the Committee also accepts his evidence that text messages exchanged between them on 14 September 2017 at 10:03 and 10:13 related to the payment of the proposed referral fee.

19. In doing so the Committee notes that the discussion on that day appears to proceed upon, and to be referrable to, a discussion about P receiving a payment for work at [CG] and an offer to provide bank “coordinates”. In the light of the Committee’s acceptance of the evidence of P that he and the Respondent had agreed a referral fee, and when seen in the context of the immediately preceding text messages, the Committee determines that the likely reason for the inquiry and offer made by the Respondent was to secure that fee. 

20. The Committee notes that the discussion on 14 September 2017 related to the sum of £15,000 which was not identifiable as a 5% figure in relation to any of various quotes submitted by B for the proposed work at the Practice. However, in evidence P stated that by the time the September text messages were exchanged the Respondent had made clear that she expected the referral fee to be £15,000 and that they felt obliged to pay it in order to maintain the prospect of further work from the Respondent.  P referred the Committee to bank statements demonstrating two payments amounting to £15,000 being made to the Respondent on 15 September 2017, described as a loan repayment. The Respondent denied these payments were in respect of any referral fee. She said that they were in respect of materials purchased by her. However, the Committee notes that the Respondent specifically requested in her text that these payments should be described as a loan repayment and the Committee finds it unlikely that P would describe payments for materials as a loan repayment if they were genuinely for materials. Further, the Committee notes that the Respondent’s position, set out in correspondence from her previous solicitors, is that the “loan repayments” were two out of four payments made to refund costs incurred by the Respondent for materials, but that the other two payments were referenced as “bathroom fittings” and “materials”. The other references being specific and referrable to tangible items, the Committee finds it unlikely that the other payments would be described as “loan repayments” if they were indeed for tangible items. In the light of its earlier conclusions, the Committee determines that it is more likely than not that that description was being sought to be used to cover the reality of the situation, namely that the payments being made were, as P explained, in payment of the referral fee. The Committee therefore accepts the evidence of P that the Respondent had, notwithstanding her prior request for a referral fee of “5%”, identified a specific sum for the referral fee of £15,000.

21. The Committee therefore determines that the payments made on 15 September 2017 to her by or on behalf of B were paid for the introduction of work to B and referral of work to B by the Respondent. 

22. In doing so the Committee distinguishes on the one hand between a payment for the introduction and referral of work, arising on securing work; and on the other, a payment made to secure a recommendation that a quote be accepted. On that basis the Committee rejects the Respondent’s evidence and submission that in a draft pre-action letter P had stated that at no time had P entered into any agreement with the Respondent to pay a service delivery fee.  The draft letter distinguishes between a fee for recommending B and a fee for securing work.

23. The Committee also determines that the Respondent’s client, the Practice, was unaware of the payments.  The Committee accepts the unchallenged evidence of A, a director of the Practice, that it was unaware of the payment until P raised the inclusion of a referral fee on 27 March 2018 during a discussion about the progress of the works.

Particular 2: FOUND PROVED.

24. The Committee determines that the conduct found proved in Particular 1 demonstrates a failure to comply with ARB’s Architect’s Code: Standards of Conduct and Practice, 2017 (“the Code”), as applied at the date of the events in question.  Standard 1.4 of the Code states that when an architect makes or receives any payment or other inducement for the introduction or referral of work, they should disclose the arrangement to the client at the outset.  The Committee has determined that the payments made to the Respondent on 15 September 2017 in the name of loan repayments were in fact for the introduction and referral of work.  The Respondent failed to disclose the arrangement. The Respondent’s failure to disclose arose in the context of her professional life and responsibilities. She was providing professional services in relation to proposed building works. As A made clear in evidence, the Practice was not in a position to decide which of the quotes it had received was most suited for the work.  On that, it relied upon the Respondent. She had been instructed to advise on how best to deliver the project, and to oversee the process. Trust was placed in the Respondent. The nature of that trust was that the Respondent would provide advice that would not be influenced by the potential for personal gain, as would occur if the contract was awarded to B. The expectation of the profession can be seen in the express terms of the Code. In failing to meet the standard expected by the profession the Respondent’s conduct lacked integrity. 

25. The Committee also determines that the Respondent’s conduct was dishonest.  In reaching that view the Committee considered first the Respondent’s knowledge and state of mind at the relevant time. The Committee determines that the Respondent was aware of the terms of the quotes submitted by B. She was aware from P’s text at 15:26 on 17 May 2017 that the first quote included provision for her requested referral fee. The referral fee was not apparent in the quote presented and so could not have been apparent to the Practice.  Despite that knowledge, she did not disclose the fee to her client. She was paid a referral fee of £15,000. The Committee determines that the likely explanation for the non-disclosure was the potential to obtain a referral fee if B’s quote was accepted, without that coming to the attention of her client so that the client could make an informed decision as to whether to accept B’s quote. The Committee determined that in the light of the agreement reached between P and the Respondent for there to be a referral fee and the absence of disclosure of any referral fee in the first quote, it was likely that B’s subsequent quotes proceeded on a similar basis. The quotes offered by B to the Practice were thus higher than they needed to be, in a manner unknown to the Practice and the Respondent was so aware. The Committee determines that the Respondent’s conduct would be considered as dishonest by the standards of ordinary decent people.

Finding on UPC

26. Having found the foregoing facts proved, the Committee proceeds to consider whether the Respondent’s conduct amounted to UPC, that is “conduct that falls short of the standard required of a registered person” [s. 14(1)(a), Architects Act 1997]. The Committee has regard to the advice of the Legally Qualified Chair that the issue of whether the proved conduct amounts to UPC is one for the Committee’s independent judgment.

27. The Committee determines that the Respondent’s conduct was serious. The Respondent deliberately procured for herself the prospect of a referral fee in the event of B being successful in quoting for the work.  She commended B’s ultimate quote.  She ultimately received a referral fee of £15,000. She did so without advising her client that she was to receive a referral fee. The Committee determines that the Respondent failed to act with honesty and integrity, in a manner that misled her client.  The Respondent’s conduct fell short of the standard to be expected of an architect. Members of the public would, in the opinion of the Committee, be shocked that an architect had misled her client in such a manner and that she secured a not insignificant undisclosed financial benefit.  The Respondent’s conduct adversely affects the reputation of the profession. The Committee thus determines that the Respondent’s conduct does amount to UPC.

Disciplinary Order

28. The Committee has proceeded to consider whether a disciplinary order is necessary.

29. The Presenter invited the Committee to consider the range of sanctions available to it and the Sanctions Guidance issued by ARB. He submitted that amongst other factors, the Committee might have regard to the Respondent’s proven dishonesty as an aggravating factor, undermining the reputation of the profession. Further, the Respondent’s defence demonstrated no insight on her part as to her conduct. He also submitted that the Committee might find the Respondent’s past disciplinary history aggravating in nature. It included a finding of UPC in 2016 in respect of, amongst other things, a conflict of interest having entered into a formal business relationship with a contractor engaged on her client’s behalf. He submitted that there was no evidence of remedial action on the Respondent’s part. He suggested that the appropriate sanction might be at the more serious end of the range of sanctions available to the Committee.

30. In response, the Respondent raised concerns as to the time taken by ARB to investigate matters and submitted that had she been aware of the allegations at an earlier stage she would have carried out further investigations into the evidence. She said that she had been highly damaged by the process of investigation. 

31. The Respondent also submitted that 2017 “was not a great moment” to be in business.  She had been under pressure from creditors. As a consequence of the challenges she faced, her personal circumstances had subsequently become strained, and she had been left with debt. She questioned whether she wished to continue to be registered with ARB. She said she would learn any lessons to be learnt. She said she now recognised the need for transparency with clients and in the future would fight for such transparency. She would interrogate people to achieve clarity in relationships. She would not make recommendations in the future. She referred to awards and recognition achieved in respect of her work. If unable to practice as a registered architect, she would have to reappraise her relationship with existing clients.

32. The Committee has carefully considered all the evidence and submissions made during the course of the hearing.  The Committee has borne in mind that the purpose of imposing a disciplinary order is not to punish an architect, but primarily to protect the public, to maintain the integrity of the profession and to declare and uphold proper standards of conduct and competence. It has taken into account the Respondent’s interests, the Sanctions Guidance issued by ARB, and the need to act proportionately, taking into account all the aggravating and mitigating factors in this case.

33. The Committee has sought to identify any mitigating factors in the Respondent’s conduct. The Committee notes that the conduct occurred in 2017 and no other matters of concern as regards the Respondent’s conduct had been brought to the attention of the Committee since then. The Committee also notes the past finding of UPC made in respect of the respondent and the circumstances found proved on that occasion. It notes that the conduct on that occasion related to a lack of clarity in relationships, rather than dishonesty. The Respondent’s conduct on this occasion can therefore be characterised as a single episode.

34. The Committee identifies as aggravating considerations the finding that the Respondent had acted dishonesty. Further, the Committee takes into account that rather than simply testing the evidence presented by ARB, the Respondent chose to advance a particular defence and make an allegation as to deceitful action on the part of others that has not been accepted by the Committee as credible.  The Committee concludes that the Respondent lacks insight into her unacceptable conduct. In such absence, the Committee is concerned as to the Respondent’s future ability to adhere to the requirements of integrity and honesty that are fundamental to practice as a registered architect. However, the Committee did not conclude that the dishonesty shown was irremediable and notes that there may have been prevailing circumstances that whilst not exculpatory of the Respondent’s conduct might have contributed to what was a single episode of serious dishonesty.

35. In the light of the seriousness of the Respondent’s conduct and the future risk of repetition, the Committee determines that a disciplinary order is necessary.

Sanction

36. Having so determined, the Committee considers first whether to impose a reprimand.  The Committee is firmly of opinion that the Respondent’s conduct was serious and in the light of her lack of insight, the risk of repetition was significant. The Committee determined that a reprimand would be insufficient to mark the conduct of the Respondent as being unacceptable.

37. The Committee considers next the imposition of a penalty order. The Committee determined that the offence committed by the Respondent was too serious warrant a penalty order within the range available to it.

38. The Committee considers next the imposition of a suspension order. Whilst the Committee finds that the Respondent acted without integrity on this occasion, it does not find evidence of entrenched integrity issues, notwithstanding the prior finding of UPC. Although having found the Respondent to have acted dishonestly, the Committee does not consider the nature of the dishonesty to demonstrate a fundamental incompatibility with continuing to be an architect. The Committee notes that in her submissions as to sanction, the Respondent did not repudiate the findings of the Committee on UPC, and she accepted a need and willingness to learn. 

39. The Committee considers that a period of suspension would afford to the Respondent a period of time in which to reflect upon the nature of professional conduct, the importance of honesty and the need for the maintenance of professional boundaries.  It would also send out a message to the public and the profession as to the importance of maintaining the standards the profession expects of its members. The seriousness of the Respondent’s failings justifies a significant period of suspension. The Committee has regard to the potential effect that a suspension order would have on the Respondent’s ability to earn a living and support her family, but also to the need to maintain public confidence in the profession. The Committee imposes a suspension order for a period of 18 months. 

40. That concludes this determination.