Question re Professional Clearance

Question re Professional Clearance

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Hi just a quick hypothetical question in case it ever happens to me! - I'm in the process of setting up!

Ok so suppose I do some work for a client and Bill them £500.
Despite reminders they don't pay me.

If I got a letter from another accountant advising me they had been approached by the client to act and could they have prof clearance plus the usual schedules,
Can I legally respond something like;
"Whilst there is no prof reason not to act I will not forward any schedules until client pays me".

Or do I have a responsibility to forward the details regardless of fees outstanding?

It's just a bit of a grey area for me.

Thanks

Replies (4)

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By johngroganjga
22nd Jan 2016 21:29

It can be a complex legal question, but essentially yes you are entitled to withhold information until your fees for preparing it have been paid. That is certainly what your first response should be. In the unlikely event that that response is met with a solicitors' letter asserting that you are not entitled to exercise a lien in the circumstances in question you may need to think again.

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By ShirleyM
22nd Jan 2016 21:41

Get a 50% deposit

Balance payable on completion. No submission until full payment received. You are very unlikely to suffer bad debts, or waste time chasing payment, if you take this approach.

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By The Grammar Police
23rd Jan 2016 20:27

As John says

It's never been decided whether non payment of fees is a "professional reason" for them not to accept instruction. Put yourself in their position, would you accept instructions from such a client? 

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By Michael C Feltham
23rd Jan 2016 20:52

Check your professional body's guidelines:

Your are entited to retain and not disclose "Work Product"; i.e. the result of your professional work.

That said, most bodies state withholding essential items which might compromise a client/ex-client's position reference statutory authorities - viz HMRC, Companies House et al - leaves you open to sanction. The civil courts adopt an identical position.

Responding to to an enqury letter where another firm has been nominated to act, is an artform!

You can use obvious innuendo: i.e. "Our relationship with this client was rather difficult, and we suspect comprehension is not one of their key strengths. We at present are patiently awaiting settlement of our long oustanding fees. Accordingly, we are unwilling to pass over the results of work product until such fees are settled."

Now, this provides the potential new adviser with a good understanding of the risks they are facing, does not, however, defame the ex-client and adds the chance of settlement from this delinquent client before they move on.

Since you have just started some cogent advice:

1.  Compose a "Standard terms and conditions of trading" statement. Include penalties for late settlement of account under the Small Business Late Payments regime:

2.  Do NOT accept instruction from small close limited companies without director/'s guarantees for fees!

3.  Ensure your "Offer to Act letter" is clear and specific: detail precisely the services you are offering to undertake:

4.  Send the prospective client a contract note for signature:

5.  Send an engagement letter to follow up receipt of .4. above, accompanied by a written statement on your costs in terms of hourly rate, charge for disburesments etc.

Intitial enthusiam is soon dissipated by objective reality!

And a shrinking bank balance or conversely, a growing overdraft...

 

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