Hi
I set up in practice about a year ago, and need to gid rid of a PITA client. I'm ACCA, havent done this before and would just like some opinions.
Limited Co, director unhappy with my fees, wants me to reduce to £200 pa for company & personal tax.
I was charging £1000 fixed fee pa. I have £300 o/s o/s from last invoice and £500 WIP in dealing with a CIS discrepancy.
He doesnt want to pay anything at all.
As I am formally engaged, can I break the engagement myself by issuing a disengagement letter? Also, can I bill my WIP even though it is a fixed fee agreement? My LOE does say time occupied basis.
If I need to pursue the amounts through the county court, will it likely result in a complaint to the ACCA?
Claire H
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Replies (16)
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and finally
10. Applicable Law
This letter shall be governed by, and construed in accordance with, English law. The
Courts of England shall have exclusive jurisdiction in relation to any claim, dispute or
difference concerning the engagement letter and any matter arising from it. Each party
irrevocably waives any right it may have to object to any action being brought in those
courts, to claim that the action has been brought in any inconvenient forum, or to claim that
those Courts do not have jurisdiction.
This letter supersedes and takes precedence over our Letter of Engagement, addressed to
you and dated ………..
11. Confirmation of our Agreement
We would be grateful if you would confirm your agreement to the terms of this letter by
signing and returning the enclosed copy.
If this letter is not in accordance with your understanding of our disengagement, please let
us know.
Yours sincerely
..................................Firm name
Hope that helps
A bit long but here is the ICAEW template part 2
5. Retention of Records
During the course of our work we have collected information from you and other parties
acting on your behalf. Some of these records and other items of documentation should be
retained by you to satisfy your statutory obligations. We will be pleased to return any
original documents or documents that legally belong to you on request.
We should advise you, however, that if you fail to collect such records within six months of
the date of this letter, we cannot be held responsible for their safekeeping and we may
destroy documents and records that we hold without further notice.
6. Confidentiality
We should also confirm that where we retain confidential information, we shall at all times
keep it confidential, except as required by law or as provided for in regulatory, ethical or
other professional pronouncements applicable to our engagement.
7. Contracts (Rights of Third Parties) Act 1999
We would also like to remind you that a person who was not a party to our Agreement
concerning the engagement letter dated …………will have no right under the Contracts
(Rights of Third Parties) Act 1999 to enforce any term of that Agreement. This clause does
not affect any right or remedy of any person, which exists or is available otherwise than
pursuant to that Act.
8. Limitation of Liability
The advice that was provided to you during the course of our professional engagement
was for your sole use and did not constitute advice to any third party to whom you might
have communicated it. We accept no responsibility to third parties for any aspect of our
professional services or work that has been or may be made available to them.
We will continue to provide any remaining professional services outlined in this letter with
reasonable care and skill. However, we will not be responsible for any losses, penalties,
surcharges, interest or additional tax liabilities arising from the supply by you or others of
incorrect or incomplete information, or your or others’ failure to supply any appropriate
information or your failure to act on our advice or respond promptly to communications
from us or the tax authorities.
You agree to hold harmless and indemnify us our directors and staff, against
any misrepresentation (intentional or unintentional) supplied to us orally or in writing in
connection with any work set out in section 3 (above) that we have agreed to complete.
You also agree that you will not bring any claim in connection with services provided to you
by the firm against any of our employees on a personal basis.
9. Fees
With reference to our fees, we calculate that there is currently no fee due to us from you.
If it is necessary to carry out work outside the responsibilities outlined in this letter, we will advise you in advance.
A bit long but here is the ICAEW template part 1
1. Purpose
The purpose of this letter is to set out matters connected with your decision to replace us as your accountants with immediate effect.
2. Summary of Services Provided
During the course of our professional work for you we have provided the following
services:
Preparation of VAT returns
Accounts preparation
Completion of personal tax returns
These services, together with a summary of the respective responsibilities of both
yourselves and us relating to them, and the terms of business on which we provided
service, were set out in our Letter of Engagement to you, dated …………..
3. Current Status Report
To ensure that you are fully aware of the current status, including applicable dates by
which aspects of these services are normally due, we attach to this letter a progress report.
This report sets out, by service, information relating to the last completed service cycle,
details of progress to date in respect of the current service cycle, and its applicable ‘due
date’. This report should assist the firm succeeding us as your accountants to assume
responsibility for this work.
4. Respective Responsibilities
With respect to our resignation as your accountants, our responsibilities to you, with the
exception of the specific matters referred to in section 3 (above) will cease with immediate
effect. You will be solely responsible for identifying another accountant to take on these
responsibilities or to satisfy the need for the services that we provided in other ways.
To assist you and any successor, we have drawn your attention to relevant dates
associated with the services provided in section 3 (above).
Our responsibilities, on resignation as accountants include those set out in our Institute’s
Guide to Professional Ethics (Statement 3.3 Section 210) to respond to the enquiry of our
successor and disclose, with your consent, any issues or circumstances relevant to their
decision to accept or decline appointment. It is also common for practitioners to combine this
initial professional enquiry with a request for information and documents relevant to the
engagement. We will, unless undue additional work is entailed, be pleased to respond to
these enquiries at no additional fee, and would be pleased if you would indicate your
agreement to our satisfying these requests by signing and returning to us the authority
attached to this letter. If you do not return the authority, we will assume that you are content
for us to co-operate with a successor as set out above.
I too need to dismiss a PITA
There is no fee outstanding in my case but he is a right smartarse so I would appreciate a C&P of a standard disengagement letter. (One man company version.)
Thanks in advance.
CCJs
One advantage of getting the CCJ is if the client needs to clear it in a couple of years time eg to get a better mortgage, new loan etc they have to pay you. I once took one out on a client for £250 plus interest ,costs etc, and she only paid the original fee, so I wrote the costs etc off . 2 years later she needed confirmation that it was cleared, so I got the rest of my money, plus my costs to write that letter.
If you get a professional clearance letter, make sure you advise the new accountant of the problems and advise them that there is an uncleared CIS discrepancy. Why should the client get that work done for nothing?
ACCA do get involved in fee disputes
First of all yes you are right to invoice. Yes keep everything in writing. Yes the client will bully you, i too have had the client billing me for his time, no engagement letter no contract - tough!
Put it through small claims yourself, the procedure isn't too onerous and ok you may have to attend court but as long as you have all the info you should win. Otherwise write it off to experience and dont be as soft in the future.
As far as the ACCA go, yes they do get involved in fee disputes. I have just finished dealing with a complaint to ACCA which involved the ex client lying to ACCA ( i proved it by forwarding a copy of my letter and his reply - get it in writing) and also proving that he had turned up at the office threatening our staff, only leaving after i had told them to call the police. (No i wasnt hiding in the toilet i was out of the office and on the mobile!).
Unsurprisingly previously happy clients who have left and been asked to pay are using the threat of a complaint to governing body as a way of trying to get out of paying a fee.
Update
I've sent a disengagement letter & billed final WIP. He is disputing.
The problem with Moneyclaim online is when the Defendant disputes your claim - Moneyclaim online cant take it further - what is the next step?
Martin, it was in a previous life as I was a FC in a small company.
I disagree
It would be a great mistake not to issue a disengagement letter. This would put YOU in the wrong!
And I Know What I Would Do ...
I'd sue the b*stard but only after I'd covered all bases by raising the proper invoice for the work outstanding and giving him an opportunity to pay. Please keep everything in writing, including his unhappiness with your present charging structure.
Yes, you can bill for the CIS work. Yes, you can disengage but don't bother because he will find another victim in due course. No, ACCA won't be interested if a spurious complaint is made.
Unlike Nigel, I wouldn't feel a lot better if I threw in the towel - I'd feel like sh*t. You need to realise that the gentleman concerned has almost certainly tried this trick before and will do so again.
That's why the only bad debts I've had in 21 years I could count on one hand (just) and they've all related to liquidations or bankruptcies. Judgment should be straightforward (refer to the first poster) but enforcement may be more difficult if he decides to "phoenix" the company.
I'd suggest treating it as a learning process. You've only been practising a year and, trust me, you will have loads more of these cases before you retire.
I know what I would do....
bite the bullet and write off all the outstanding work.
Just send them a dis-engagement letter and heave a big sigh of relief that you will never have to deal with them again.
Believe me, you will feel a whole lot better and a weight will be lifted from your shoulders.
(I did exactly this a couple of weeks ago!)
Anger
Clients often get very angry in these circumstances. I had a case recently where I sent a final demand to a client for a long-outstanding fee (after sending a fully detailed 6-page disengagement letter, as recommended). He retaliated by sending me am invoice for the same amount, being time spent by him @£100 per hour at a free seminar held by my firm, and at a Christmas lunch to which I had invited him 3 years previously.
p.s.
quote
I've used Moneyclaim several times before, I usually do a polite letter, hard letter, notice of intention to commence legal proceedings then a court claim online.
unquote.
Is this in the context of having been in practice for one year, Claire?
Seems a heck of a lot of fee disputes?
Or am I misunderstanding, and the several times of proceeding through Moneyclaim to a court claim online relate to prior experiences?
albert's story.....
..... was not about a £200 fee dispute, Claire.
(His story was that he is bi-polar, and fell out - big time - with his wife, his business partners, his brother, let alone a client ; the latter fall-out led to ICAEW problem, but client did not lay a complaint about a £200 fee as such).
All professional bodies (including accountancy bodies) steer as far away from fee disputes as they possibly can, which is a long way.
So you just need to make it crystal clear (in your letter to client summarising your position) you have a fee dispute - and that all else follows.
If you choose to disengage because of the hassle (rather than put it to the client in writing you will complete but want the agreed money for so doing), it becomes a bit of a bun-fight unfortunately ; both parties will be arguing contractual non-performance.
You will have the irritation of proving that your esteemed client's non-performance was the reason for your non-performance, and hence your asserted right to appropriate compensation for your attempted performance.
(and, by the sounds of it, your rights to payment for a different / additional piece of work ; viz the CIS discrepancy).
It sounds a tad messsy, but only you know the detail.
But rest easy on your main concern ; keep the disagreement firmly on fees, and ACCA should not be interested in pursuing a client complaint.
Hi
Yes I've used Moneyclaim several times before, I usually do a polite letter, hard letter, notice of intention to commence legal proceedings then a court claim online.
Thats not the problem, its just I wondered whether it was usual to bill WIP when you have a fixed fee agreement, but more I'm concerned whether ACCA go for you.
There was another poster here recently (Albert Canus) who had a £35k fine from ICAEW for chasing someone for £200.
Write and confirm your disengagement but be careful re the coun
I;m an ACCA member and have had in the past a similar situation. Based on my experience I would..
1) Write to client saying that you are disengaging w.e.f a given date . State in the letter exactly what work you have completed to date. Send the letter by recorded post. Let him go to the competion and annoy them with requests for cheap fees.
2) Why does he not want to pay anything? Is he saying that you have overcharged, or that yuo have not done something. I would not bother with the county court for £500 - you will simply spend more time dealing with the claim andyou will not get your costs, even if yuo win.
3) I'd write and ask for the £300 that has been billed and perhaps some of the £500 . You may wish to use a lien, or threaten court proceedings but I would be careful . Not because of a complainnt to ACCA (they don't concern themselves with fee disputes) but because of the time it will take you to pursue the matter.