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Client Accusations

Do I wait or take him to court

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Last week, I sent an email to an ex-client equesting payment of fees.  He reverted saying he would only pay £400 per month when he can afford it.  He follow up last week with a number of emails saying his new accountants have found a number of errors plus questioning my abilities.  Really did annoy me but I just didn't reply as this person is not rationale.  Though my conscious is clear as it was a difficult engagement and client with extreme time pressures.  He was very happy until he saw the invoice.

Now do I take him to court which I understand may take a year due to the backlog of cases.  Don't think he will defend the case  as he said he would pay which I understand makes him liable by law but may try to complain to my accountancy body which he has done with one other previous accountant or wait patiently which may take around six-seven months to clear the debt.  

If he decides to complain to my accountancy body will they see through someone who is intent taking revenge or look at the work carried out. 

 

 

  

 

Replies (51)

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By Andy556
16th Mar 2021 12:23

If it's an agreed payment plan then leave it at that.
If he says he will pay as and when he can then that's not a payment plan, I'd get an agreement with a timescale in place.
Then when the payments are missed apply for county court claim and go with the process. The process doesn't take a year, if it gets actually gets to court/bailiffs then that may be delayed. If he doesn't defend himself then you can get a CCJ in less than a month.

Your accountancy body (if he complains) with take an interest but will look at it on it's own merits, they won't automatically side with anyone so as long as you've done nothing wrong then you're fine. If he's got a history of complaints to accountancy bodies and is proved wrong each time, I'm not saying he does, but it won't exactly go in his favour.

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Replying to Andy556:
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By sanjay100
16th Mar 2021 12:43

He refuses an formal payment plan even though I have requested it several times He pays whenever he wants to. I understand there are long delays with small claims court cases

I am concerned at the hassle of a complaint.

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Replying to sanjay100:
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By memyself-eye
16th Mar 2021 13:59

"whenever he wants" = NEVER.

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By wingman22
16th Mar 2021 12:42

Sanjay - I hope this isn't your (ex) friend. You seem to be having a tough time at the moment.

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Replying to wingman22:
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By sanjay100
16th Mar 2021 12:53

No not a ex-friend. Yes its been a tough time - not good timing. Client is bitter and becoming obsessive. First time, I have considered taking a client to court - its a learning curve.

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Replying to sanjay100:
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By I'msorryIhaven'taclue
16th Mar 2021 13:34

Individual or limited company?

Either way, a county court won't help you much. Backlogs aside, your ex-client will turn his pockets out, plead poverty, and the judge will make an order for a minimal monthly payment. Your legal costs will be added to his tab, so it'll take you some months just to recover those.

A couple of months in he'll stop making the monthly payments, leaving you to shell out more legal fees to haul him back into court to begin the entire cycle again.

Assuming this debt is for less than £10k then a small claims court would be my preferred route. Costs very little, and informal so that both sides usually represent themselves (so no solicitors' fees).

Where you're on rocky ground is that a court - any court - will expect you to have attempted to resolve the matter first; court being a last resort. In your shoes I would write to your ex-client to quantify the claim, give him a reasonable amount of time - say 28 days - by which to *pay, and let him know you'll be taking the matter to court if he fails to make that payment.

*You're dealing with someone who knows the ropes. An offer of £400 a month is likely to be reasonable in the eyes of the court; and so you should purport to accept** it provided he pays the first £400 by a certain date. Make it at least 28 days (I should go for 35), and monthly thereafter. If he fails to pay the first £400 by that date, then the court will look favourably upon you for going through the motions and acting reasonably (and the converse for your ex-client).

**In reality the "offer" from your ex-client isn't really an offer that's capable of being accepted by you, because "as and when I can afford it" is arguably too vague a term. Only the amount, £400 (per month?), is clear. The effect of such a vague "offer" is that when you write asking him to pay by a certain date (or else court!) then you would in all probability be making a counter-offer which your client might either accept or reject (and such acceptance or rejection needn't be communicated to you - his actions will do that. There'll either be an implied acceptance of your offer by his paying by the date you set; or an implied rejection by his not paying). In summary, and for the avoidance of doubt, you cannot accept his offer (because it's payment terms are too vague and uncertain); instead you should make a counter offer - £400 pm with first payment by x date - which he will accept or reject, if not by his word then by his actions.

Hope that helps.

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Replying to I'msorryIhaven'taclue:
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By sanjay100
16th Mar 2021 13:56

Thank you for a detailed response.

Its limited company and less than 10K.

I already tried a few months ago to get payment by a certain date but he refused then made a payment and nothing since. He is saying payment will be on his terms and fortunately he has not any stage that he is not going to pay

I may get a solicitor to send a letter before action but that may just set him off and refuse to pay at all. The problem is I just don't want this to drag with will he or wont he pay this month. At least with a small court claim there is a end game. I already told him if he doesn't pay in full the matter will go to court. If I don't then he's called my bluff and end up losing face. Difficult one

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Replying to sanjay100:
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By I'msorryIhaven'taclue
16th Mar 2021 14:34

Hi Sanjay,

Well it sounds like you're doing everything right to get the court on your side.

I shouldn't go the solicitor's letter route. A small claims court will prefer it if you deal with matters yourself, and for that matter represent yourself in court. Once you escalate it to solicitor's letter then he might have no option but do the same, and you end up by-passing the small claims court route. Just send him a "final notice" yourself telling him that if he doesn't pay his £400 instalment by the date you've already specified then you'll instigate court proceedings, and that he may be liable for any additional costs.

Good hunting!

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Replying to I'msorryIhaven'taclue:
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By sanjay100
16th Mar 2021 14:55

Thank you. I was hoping he would have paid £400 by now. I thought I would use those cheap solicitors that send just the letter before action then wait for a little bit and see what he does before commencing court proceedings.

I thought you can still have legal representation in small claims court but the costs cannot be recovered. He couldn't afford a solicitor especially plus he knows the case is clear cut and work has been done even though he may say unsatisfactorily.

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Replying to sanjay100:
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By I'msorryIhaven'taclue
16th Mar 2021 15:29

Well the conventional wisdom as I've always understood it is that a small claims court doesn't look favourably upon one side or another introducing legal professionals into the proceedings. For which reason you can indeed expect to pay your own solicitor's costs. The whole ethos underpinning a small claims court - that it is cheap and informal, and that you can don a suit and tie and represent yourself - is undermined by one side escalating matters to solicitor-level.

The judge will want each of you to tell your side of the story, and to question each of you to see which of you, on balance, has the most deserving case. Not unlike a visit to the headmaster's study! Hiring a legal representative would only serve to hamper that process, and in the absence of any complex legal matters is unlikely to work in your favour.

If you want to splash out on professionals to help bolster your case, maybe set your sights on obtaining independent expert opinion that your work was performed to a satisfactory standard, in anticipation of your ex-client's anticipated contentions to the contrary.

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By AlgernonB
16th Mar 2021 13:01

The offer to pay you £400.00 per month when he can afford it sounds reasonable enough, and I would be inclined to accept it, given the state of the economy.
The new accountant sounds a bit imaginary- who would take on a new client with money problems, worse, one with a poor relationship with their former advisor?
Court is for those with more money than sense; avoid it.

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Replying to AlgernonB:
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By sanjay100
16th Mar 2021 14:00

I did the same so perhaps its comeuppance as huge bust up with his previous accountant. I think I may ask them for a witness statement if it come to it,

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AS
By AS
16th Mar 2021 13:04

I have had a similar situation in the past. The client did complaint to the ICAEW and I then had to spend many hours providing evidence against every point of the complaint before the investigating officer accepted that it was just a malicious complaint from a client that wanted to avoid paying fees and maybe getting some compensation as well.

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Replying to AS:
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By sanjay100
16th Mar 2021 14:01

Yes that is my concern the additional time and hassle to sort it out with my accountancy body.

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By OldParkAcct
16th Mar 2021 13:35

Court action is probably going to delay payment, if he is making monthly payments these will probably stop as soon as you start formal proceedings.
The problem you have is he was surprised by the amount of your bill. Learnt a long while ago that this never ends up in a happy conclusion. Much better to be realistic about the fee from the outset and update them as soon as there is any change to the expected bill. You may end up losing prospective work if they are fee sensitive, but at least you know you will be paid for the work you do.

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Replying to OldParkAcct:
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By sanjay100
16th Mar 2021 14:08

The problem is I have given him a deadline that will start court proceedings if payment is not paid in full. I do not want exchange emails with him as he will go on a rant

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By Calculatorboy
16th Mar 2021 14:16

You need to send him a reasonable payment plan £× pm for x months and tell him if he misses a payment proceedings will be commenced with further notice to include costs interest etc .

say proceedings will be commenced if he doesnt agree within x days

Rebut his allegations of poor work .

And just wait .

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Replying to Calculatorboy:
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By sanjay100
16th Mar 2021 18:12

I had sent him a payment plan with dates of the £400 but he refused as he will pay whenever he wants to. No point trying to reason with someone so bitter. I can tell from his emails this is getting to him.

I don't really want to write to correspond with him as he will just make further accusations. I have no doubt he revert shortly after his accountant have gone through my work.

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By tom123
16th Mar 2021 14:34

If you have a good hard look at yourself - be honest, could there be any merit in his claims?

In reality, if you just accepted the write off, and moved on, would you not be happier?

Sounds like you are struggling based on recent postings.

Good luck finding better clients next time.

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Replying to tom123:
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By sanjay100
16th Mar 2021 14:53

There were judgements we made due to the lack of information. I am only aware of one error that I have found (not him). There maybe others but he may just work with his accountant to find them however petty it maybe

Yes its been a struggle but I don't now want to write it off and prefer just the matter is dealt in court

Only had two clients I have fallen out with so been fortunate and one came as a client last year.

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Slim
By Slim
16th Mar 2021 17:41

I’d arrange a payment plan and if he misses a payment it’s straight to court.

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By Matrix
16th Mar 2021 18:07

I would follow calculatorboy’s advice. Then draw a line and don’t waste any more time and energy on this.

Put it down to experience and never file anything or do a handover again until you have been paid.

If you are an ICAEW member then try CABA as they are a great resource (although I really think you should draw a line).

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Replying to Matrix:
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By sanjay100
16th Mar 2021 18:24

I have tried with a payment plan with dates but to no avail. I could engage a solicitor just to send out one letter to agree a payment plan with Letter before action otherwise straight to small claims court though since he is so stubborn he will refuse to sign

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By Matrix
16th Mar 2021 18:59

OK it sounds as if you have tried but, since you did ask for input, I would choose one of the above answers and give it a go.

And I don’t know why you mention that the accountant will go through your work and pick holes in it. I wouldn’t say this is a priority with a new client.

Do you have a family member or friend you could speak to since I really think you need to gain some perspective and put this behind you? Or get some fresh air and exercise and book something nice for when lockdown ends so you stop thinking about this.

I have just joined a mentoring group comprised of local business owners, maybe something similar would be useful, especially if you live alone or don’t want to bore your spouse or flatmates with work issues.

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Replying to Matrix:
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By sanjay100
16th Mar 2021 21:01

These new accountants while preparing the accounts have already mentioned a couple of things to this client and he got excited. Luckily I was able to counter it but expecting more stuff to come out as this situation escalates. I have been guilty in the past of just pointing some stuff out that needs to be adjusted from the former accountants work.

Yes that lost friend and client was the best person but sadly confined to the history books. Unfortunately, I don't have anyone who understands. Though always wanted to create a group just for sole practitioners as it is a lonely business. Speaking to someone would definitely have helped but accountingweb is the next best thing so thank you all.

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By Refs1
16th Mar 2021 20:31

Recently had a bad experience with a former client. Owed us money. Was verbally abused and threatened me. Had to involve the police. Took it no further and wrote the debt off. I was not going to give the client satisfaction of coming down to his level. Could have off took it to court.

The lesson learnt was now ask for money on account. Introduced this and it worked, so can now take a positive out of a negative.

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Replying to Refs1:
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By sanjay100
16th Mar 2021 21:04

Wow that is so awful must have been extremely stressful but the guy is a bully and got away it. I am just dealing with someone whose brain is missing,

I guess the positive in this situation is learning the legal procedures

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Replying to sanjay100:
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By Refs1
16th Mar 2021 21:40

Initially yes as it can out of the blue with no warning. That was the first call, the second call I put him in his place remained professional and told him exactly what I thought. He was informed not to contact me again. He is a bully, and yes I lost some money, but I kept my pride and moved on. The cost of court time, phaffing around and generally pandering to him would have not been worth the hassle. I was tempted to take him to court, but thought why bother!

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Replying to Refs1:
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By sanjay100
17th Mar 2021 10:37

I have also told this person not to contact me again but still wants to make his point. just have ignored his ill founded comments. Often a legal letter or court claim is used to make the defendant know that this matter is serious. In most cases I gather it does not even reach court.

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Slim
By Slim
16th Mar 2021 20:49

How much are we talking?

You wouldn't take something from Tesco without paying and expect everyone to let you get away with it, to me it's the same.

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By jantill
17th Mar 2021 00:43

If you think that your ex-client has sufficient assets to cover your bill and is trading profitably have you considered a winding-up order?
I believe that it may concentrate his mind.

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Replying to jantill:
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By sanjay100
17th Mar 2021 10:31

He does have a lot of assets. I don't think statutory demand is permissible in the present climate. If it was and they call my bluff then its is expensive to go down the route of winding up and the costs would wipe out the debt

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Replying to sanjay100:
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By I'msorryIhaven'taclue
17th Mar 2021 11:06

There's always the danger a court might see that as malicious; a spurious claim on your part, perhaps.

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By AthollAccounts
18th Mar 2021 14:32

Could be worth speaking to a collections agency rather than a solicitor. There are a number who will chase for a reasonable percentage of the fee. I think that might be a good way to distance yourself from it a bit.

I know it doesn't help you now, but it might in future. My previous firm had a policy of never releasing information to a new accountant until all outstanding fees were paid.
I now do the same and have it in engagement letters. Its only been an issue once, and despite pleading poverty they were able to pay a substantial fee in a couple of weeks.

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Replying to AthollAccounts:
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By sanjay100
23rd Mar 2021 20:30

Yes I need to distance myself from him and his accusations. I just don't like receiving his emails. I am not sure how effective collections agents are as they will just chase but have no powers. A solicitor letter followed up with court papers (which I will do) may have an effect as he knows he doesn't have any defence, I expect he will follow this up with a complaint to my accountancy body as a matter of vengeance,. I know how it works.

I spoke to my accountancy body and they said the professional clearance and outstanding debts are separate issues so had no choice

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Alex
By scurlage
19th Mar 2021 10:08

"new accountants have found a number of errors plus questioning my abilities"

Probably trying to gaslight you

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@enanen
By enanen
19th Mar 2021 10:08

It's an old trick. However the time you waste and court costs make it better for you to ignore and find new better work. All he has to do is object/defend the court demand and you are into months of it.

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Replying to enanen:
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By sanjay100
23rd Mar 2021 20:33

Its already wasted a lot of time but cannot let him get away with it.

Only issue it will be hanging over my head for several months there again he only paying on drips and drabs

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Lone Wolf
By Lone_Wolf
19th Mar 2021 10:36

You're really not having any luck recently Sanjay.

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By rawa363
19th Mar 2021 10:39

I doesn't sound as if there is a payment plan in place. You proposed one at £400 per month which he from what you say has not accepted because he has said he will pay when he can. Paying when he can is not agreeing to a payment plan, it sounds as if he's trying to get you to agree to his which is I will pay when I can, neither does 'paying when I can can' mean he's going to pay £400 it means he'll pay what he can when he can. Any payment plan needs a document signed by both parties agreeing to it.
Experience tells me people like this will continue with a never ending list of reasons they can't or wont pay, you need to get tough. Don't mess around with solicitors letters. Send him a letter saying his response to your payment plan of paying when he can and what he can is not acceptable. Make the offer again and include a document requiring his signature as agreement to it to be returned withing 7 days. Add if this document is not forthcoming you will seek redress through the small claims court. The go to the small claims court, do it online, the vast majority of people never contest it in court so your claim is upheld. Getting judgement doesn't mean you'll get paid, not right away, but you will in the end when it starts to impact on his ability to get involved in normal financial transactions such as an mobile phone contract. Once judgement is received you can if they don't pay within a reasonable time seek a court order which will mean bailiffs, this can be pointed out which may make his decision on paying you easier to make.

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Replying to rawa363:
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By sanjay100
23rd Mar 2021 20:38

I have tried to get him to sign the payment plan but he refused. I may get a solicitor letter to get him to sign the payment plan or just take it to the small claim court which I don't think he would want as he is constantly in dispute with people and was getting fed up with the aggro. I don't think he has any understanding of legal or financial matters and is incredibly disorganised so often he is reliant on solicitors.

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Replying to rawa363:
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By sanjay100
23rd Mar 2021 20:38

I have tried to get him to sign the payment plan but he refused. I may get a solicitor letter to get him to sign the payment plan or just take it to the small claim court which I don't think he would want as he is constantly in dispute with people and was getting fed up with the aggro. I don't think he has any understanding of legal or financial matters and is incredibly disorganised so often he is reliant on solicitors.

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By I'msorryIhaven'taclue
19th Mar 2021 10:51

Sanjay, what do you know about this client that might give you some leverage?

Is his company on the published furlough claim list, and if so can you get on his case by policing his work activities?

Has he had any flirtations with his staff? Does he gamble or keep bad company? What do you know that he wouldn't like his wife / customers / new accountant to know?

Any contacts common to you both? It's surprising how dealing with a non-payer can upset you so badly it can cause you to inadvertently include such contacts in your emails to him demanding payment.

Gloves off!

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Replying to I'msorryIhaven'taclue:
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By sanjay100
23rd Mar 2021 20:43

I could play dirty as I could contact his previous accountant whom he had huge fall out including legal action with so would be ideal for a witness statement in court and if he complains to my accountancy body. Though maybe in breach of confidentiality,

He is one of the worse type of clients you could come across so much to tell but will not bore you with the detail as need to be undercover too. I think only worse would be if he used some form of aggression luckily he is not like that.

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Replying to I'msorryIhaven'taclue:
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By sanjay100
24th Mar 2021 08:25

Also would it be best engage debt collectors rather then solicitor as he had agreed to pay and had been paying bits here and there.

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By emilefrode
19th Mar 2021 11:46

Presumably you've had the usual handover letter from the new accountants. If so write to them and ask them to show evidence in support of what they are supposed to have said about you. I expect it will come as something of a shock to them and they may decide they don't want to act for this guy.

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By alanlee
22nd Mar 2021 09:18

In my view & if i was in this situation I would politely email or write to the new accountant and ask for details of the apparent errors in the previous accounts prepared.

Once received I would be in an informed position to make the right decision.

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Replying to alanlee:
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By sanjay100
23rd Mar 2021 20:51

Yes there could be errors as it was a difficult assignment at the last minute when the client was unhelpful to my queries so there was some judgement calls made. I don't want to know the errors then I will have to look it up and justify it.

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By alanlee
22nd Mar 2021 09:18

In my view & if i was in this situation I would politely email or write to the new accountant and ask for details of the apparent errors in the previous accounts prepared.

Once received I would be in an informed position to make the right decision.

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By alanlee
22nd Mar 2021 09:18

In my view & if i was in this situation I would politely email or write to the new accountant and ask for details of the apparent errors in the previous accounts prepared.

Once received I would be in an informed position to make the right decision.

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