Alice in Regoland

alice-wonderland

‘Alice in Regoland’ – Public Interest Regulation in Malta’s Property Industry

In Lewis Carroll’s children’s story ‘Through the Looking Glass’, the White Queen explains to Alice “It’s a poor sort of memory that only works backwards”; other writers have expressed a similar sentiment – essentially that those who do not learn from history are destined to repeat it; and generally they mean,  not in a good way!

I have been watching with some interest recent discussions on how the Maltese Government proposes to ‘regulate’ the buying and selling of property, and I have to declare an interest: well actually two interests – firstly in terms of the concept of ‘professional regulation’ and secondly in terms of the property sector in Malta.  You see, I am currently a Director in Malta’s first truly on-line Real Estate Agency HomeSaleMalta.com. But in my previous career I have had more than a fleeting involvement in ‘regulation’ – for years I worked in what we in the U.K. called ‘Regoland’.

As I will expand on later when I point out some lessons I have learned, I have had three regulatory roles; Regulating police forces. Setting up a Healthcare super-regulator in the UK and helping to set up a new regulatory body for Barristers in England and Wales.  The sectors might sound quite diverse, but the features of regulation had a lot in common so have a relevance as we consider how best to deal with the property sector in Malta. (Although as an old lady said in a film I watched last night, ” I don’t give advice, but I do have opinions”.)

The concept of Professional Regulation has a very long history – in most countries; for example Doctors started  ‘Self Regulating’  well over 100 years ago; but the development of ‘Public Interest Regulation’ is a much more recent phenomenon, grown out of fears that ‘Self Regulation’ wasn’t objective enough to adequately protect the public interest, or at least that was the public perception. 

So What’s a ‘Profession’

In broad terms a profession is an occupation in which an individual uses skills based on an established body of knowledge and practice to provide a specialised service in a defined area, exercising independent judgement in accordance with a code of ethics and, ideally, in the public interest.  So in terms of the property business, you can sell or buy your home entirely on your own; and many people do so – however, if you choose to use the services of a ‘professional’ there should be some measures in place to give you comfort that the person you are entrusting with this important transaction is competent and trustworthy and in fact is acting in YOUR interests (not just their own).

In a self-regulated profession, the professionals agree entry standards (who can join), training standards (what they need to know to be effective), performance standards (what’s expected of them), a disciplinary process (how to complain and how it will be processed) and sanctions (being struck off the register of having conditions or limitations put on what you can do etc).  The disquiet about this was that essentially then a profession could investigate complaints against its members, have members prosecute a discipline case, have other members sit in judgement and decide on the sanction.

So the first phase in development from self regulation to public interest regulation was to start including ‘lay members’ – people who were not member of that profession – to have roles in the investigation or decisions on prosecution or sit on hearing panels.  As this developed there was a call for further separation of these functions so now in many professions we find totally separate complaints and discipline bodies whose role is to act ‘in the PUBLIC INTEREST’.

Public Interest Regulation

My first foray into regulation was when I was a Chief Police Officer in Scotland and was appointed as Inspector of Constabulary – checking up on how 8 wholly constitutionally independent Chief Constables policed their areas; this was a public interest oversight role and to make clear that I was independent of both Government and the Police Service, I was appointed by the Queen, and my ‘badge’ was her crest not a police one.  I might have been appointed to be totally independent – but I was overseeing organisations I had been part of for over 25 years; so from a public perspective was I truly independent and could they have trust I was acting in their interests?  The push for independent oversight has since resulted in the creation of an Independent Police Investigations and Review Commissioner in Scotland.  The Police Inspectorate still oversees how police forces operate, but the PIRC provides the objective independent public interest oversight and remediation.

In England in 2002 there was a Public Inquiry in to the tragic deaths of a number of children in heart operations at Bristol Royal Infirmary.  The outcome was a decision by the Government to establish a new ‘super-regulator’ (CHRE, the Council for Healthcare Regulatory Excellence) to oversee the conduct of the 9 established healthcare regulators (Doctors, Dentists, Nurses, Pharmacists, Opticians etc).

In 2003 I was appointed as this new Body’s first Director and had the job of setting it up from scratch.  The 9 regulators had different operating models – all had Lay involvement (i.e Board or Panel members who were not members of the profession) in their complaints and discipline processes, but when you looked at their discipline outcomes, on occasions (not that many occasions it has to be said) it seemed that they had been too ‘understanding’ of the professionals actions and less focussed on the patients interests.  Actually they were doing a reasonably good job in regulating their professions – but importantly had lost some public confidence through various ‘scandals’ – so one of the main values of the independent oversight was re-establishing trust, trust that there was an independent oversight of the professions by a body whose whole raison-d’etre was acting in the PUBLIC INTEREST. Things have progressed even from there and now CHRE has been morphed into the current Professional Standards Authority for health and social care (https://www.professionalstandards.org.uk/) but the role remains fundamentally the same – independent oversight of professions in the public interest.

While I was at CHRE the UK Government decided that the legal professions – Solicitors and Barristers should also be subject to independent oversight and scrutiny, with a similar approach to injecting lay involvement and independence into their complaints and discipline process; so I was appointed as a Lay Member to help set up the Bar Standards Board – the new regulatory body for Barristers in England and Wales.  There was an undercurrent of opposition from a small number of members of the profession that things were fine as they were and that ‘market forces’ made sure that only good Barristers earned enough money to stay in business – which may well have been fine for the wealthy or the corporations who could choose the best and pay accordingly, but not for those less fortunate who could afford the less busy (often less able) to act for them.  Barristers and Solicitors in England and Wales now both have independent regulatory bodies – the Bar Standards Board (https://www.barstandardsboard.org.uk/) the Solicitors Regulation  Authority (https://www.sra.org.uk/home/home.page)

From my involvement in regulation in these different sectors, I have a number of key ‘opinions’ which might shed some light on the current debate in Malta about how the property sector  should be overseen or regulated.

It is fundamental that the oversight system gives the public confidence that their agents are trustworthy, have sufficient understanding of the sector to represent their interests and are acting in their interests (not just self-interest).  There needs to be standards set for behaviour, entitlement to practice, and a viable complaints and discipline set up to deal with the situation when things don’t go well

Professional Self-Regulation works best if there is independent oversight to ensure that things are being done properly – often within a profession well meaning professionals are too close to the business – and other members –  to be properly objective about how that meets the public interest test

A transparent complaints handling and credible disciplinary system are needed to retain public trust; and the bodies doing that should have a Lay Majority i.e more than 50% of the members of an independent complaints authority should be people who are not members of that profession – that is what helps reassure the public that it’s a public interest system. In my experience generally ALL members of such oversight boards are committed to the public interest, so the 51% lay majority is a symbolic gesture to confirm to the public it is not led by the profession.

There is a cost in establishing an oversight infrastructure, but again in my experience this is minimal as the professional and Lay members involved are usually happy to undertake this role on a pro-bono basis out of a desire to secure public benefit.  As I recall when we set up the Bar Standards Board, the cost to professionals was less than if they had wanted to be registered Gas installation engineers.

I would urge those who are discussing how best we should regulate the property sector in Malta to have a look at the links I have provided above – there is a clear chronology: professional self-regulation to at least provide some basic protection that those professing to be a professional at least have the basic qualifications and skills and trustworthiness to allow them to operate, then external oversight by a body that has some power to intervene if the profession isn’t operating properly, then independent investigatory and complaints and discipline body to secure the public interest.  In many professions that nowadays benefit from effective Public Interest Regulation, the journey from self-regulation to that has taken 100 years – here in Malta we don’t actually need to start at the beginning; we can learn from the journey that has been taken by others.

I will end with another quote from Lewis Carroll where Alice asks the Cheshire Cat for directions:

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“Would you tell me, please, which way I ought to go from here?”
“That depends a good deal on where you want to get to.”
“I don’t much care where –”
“Then it doesn’t matter which way you go.” 

Most regulation introduction has been ‘prompted’ by ‘scandal’ – So, whether in the real estate sector or the Notary Public sector; lets have a clear direction, and lets start from where others have left off, not back at the beginning.

Sandy Forrest

B.A; CMILT; FRSA.

Linkedin; Sandy Forrest (General Manager National Security & Resilience ATOS)

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