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Ideas needed

Intriguing problem

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A semi retired accountant friend of mine has recently died. His widow is left with about 100 live client files and the problem of what to do.

I've spoken to a firm who would be interested in picking up the clients but the widow has Data Protection concerns.

Can she just pass over the files and the new firm contact the clients

OR

Can she just give the names & addresses of the clients and pass the file when she has a written authority from each client obtained by the new firm

Or neither in which case what is the way forward. She doesn't want the problem of writing to all of them or the cost of sending the files back 

I wasn't interested in taking over the client base for various reasons

Your wisdom needed  please 

 

Replies (26)

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By Clinton Lee
03rd Dec 2019 12:31

Was he operating as a limited company and does she have the option of selling the shares?

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By JDBENJAMIN
03rd Dec 2019 12:45

She should get a solicitor's advice. I would wager none of us know the law well enough to advise.

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Hallerud at Easter
By DJKL
03rd Dec 2019 12:49

With 100 clients really not that semi retired, a lot of work for someone (did he have an alternate?) if they all head in different directions.

Can the widow maybe initially appoint the other firm as subcontractors (re each case) and the files are therefore still legally held by her as his executor, they then do the donkey work contacting the clients on her behalf or something similar.

Whilst above possibly tramples GDPR frankly it is actually best for the clients that their replacement accountants, whoever they are ,carry over data from the old firm.

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By bernard michael
03rd Dec 2019 14:03

Not limited - sole trader
Widow wants to wash her hands of the problem
DJKL
Interesting answer

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Bramble
By Chris.Mann
03rd Dec 2019 14:29

"I've spoken to a firm who would be interested in picking up the clients but the widow has Data Protection concerns."

Perhaps a telephone conversation with the Information Commissioners Office, might be a sensible move?

From a practical point of view, it's whether GDPR has been tested in these circumstances.

Whilst I'm sure everyone concerned wishes to assist the accountants widow, as quickly and efficiently as possible, one must have the best interests of the client's at the forefront of any action, to protect their privacy.

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By kestrepo
03rd Dec 2019 15:13

Neither is my answer!

As with most business transactions there should be some kind of a contract in place between the parties.

The contract should mention data protection as this is the concern of the Widow but also confirm hand over dates, costs, value of the sale, who the parties are, what they are taking over, what the documentation is etc (who, what, why, when, where)

I don't think that you will necessarily need a solicitor to draw a contract up but if this transaction is well documented it will offer protection to all parties and hopefully give the Widow some piece of mind in these difficult circumstances.

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Replying to kestrepo:
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By bernard michael
03rd Dec 2019 15:24

kestrepo wrote:

Neither is my answer!

As with most business transactions there should be some kind of a contract in place between the parties.

The contract should mention data protection as this is the concern of the Widow but also confirm hand over dates, costs, value of the sale, who the parties are, what they are taking over, what the documentation is etc (who, what, why, when, where)

I don't think that you will necessarily need a solicitor to draw a contract up but if this transaction is well documented it will offer protection to all parties and hopefully give the Widow some piece of mind in these difficult circumstances.


Not sure how this gets round Data Protection as she will be passing over client information without their approval

Tricky isn't it to do he best for everyone but within the law

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Replying to bernard michael:
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By kestrepo
03rd Dec 2019 15:44

GDPR made it mandatory to have a contract in place with any third party you pass data to.

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Replying to kestrepo:
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By bernard michael
03rd Dec 2019 16:00

kestrepo wrote:

GDPR made it mandatory to have a contract in place with any third party you pass data to.

I agree and one will be put in place. However the query now boils down to whether she needs the clients' permission before passing on their data

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Replying to kestrepo:
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By paul.benny
03rd Dec 2019 16:42

kestrepo wrote:

GDPR made it mandatory to have a contract in place with any third party you pass data to.

Another GDPR myth - although if you're passing *personal* data to a third party, you probably do have a contract with them anyway.

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Replying to paul.benny:
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By kestrepo
03rd Dec 2019 16:48

"GDPR makes written contracts between controllers and processors a requirement, rather than just a way of demonstrating compliance with the seventh data protection principle (appropriate security measures) under the Data Protection Act 1998. These contracts must now include specific minimum terms...."

https://ico.org.uk/for-organisations/guide-to-data-protection/guide-to-t...

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Replying to kestrepo:
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By paul.benny
03rd Dec 2019 16:57

I stand corrected.

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Replying to kestrepo:
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By john hextall
06th Dec 2019 13:45

I don't think that is entirely relevant. The deceased accountant would have been the controller and should, in his GDPR policy, have specified what he was doing with the data. Ideally it would say who he was sharing the data with and for what purpose and this could be the starting point. If the widow wishes to retain 'control' but hand certain data over to a 'processor', she would need a contract but it does not sound like this is the case.

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By Red Leader
03rd Dec 2019 16:39

Just pass it on to a broker to deal with.

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By paul.benny
03rd Dec 2019 16:51

It's simply not true that consent would be needed to pass the files to another accountant in this circumstance. If the deceased had sold his practice just before death, no-one would saying the files can't be passed to the new accountant. This is no different.

Assuming this new accountant is taking on the entire portfolio, give him/her the lot. S/he should mail out to the client list, explaining the situation and inviting them all to stay with the new practice or go elsewhere. If a client wants to leave return their documents.

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Replying to paul.benny:
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By WhichTyler
03rd Dec 2019 17:31

paul.benny wrote:

It's simply not true that consent would be needed to pass the files to another accountant in this circumstance. If the deceased had sold his practice just before death, no-one would saying the files can't be passed to the new accountant.

Er I think they might...

paul.benny wrote:

A If a client wants to leave return their documents.

And delete their data from your systems

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By philrob
03rd Dec 2019 16:51

GDPR has 'Legitimate Business Interest' as a reason to share data.

-- From the ICO Website:

When might legitimate interests be appropriate?

Legitimate interests is the most flexible of the six lawful bases. It is not focused on a particular purpose and therefore gives you more scope to potentially rely on it in many different circumstances.

It may be the most appropriate basis when:

the processing is not required by law but is of a clear benefit to you or others;
there’s a limited privacy impact on the individual;
the individual should reasonably expect you to use their data in that way; and
you cannot, or do not want to, give the individual full upfront control (ie consent) or bother them with disruptive consent requests when they are unlikely to object to the processing.
There may also be occasions when you have a compelling justification for the processing which may mean that a more intrusive impact on the individual can be warranted. However in such cases you need to ensure that you can demonstrate that any impact is justified.

The legitimate interests basis is likely to be most useful where there is either a minimal impact on the individual, or else a compelling justification for the processing.

--END EXTRACT--

If the potential acquirer is a member of a professional body then they will (should?) know and respect data privacy.

Were I a Client I wouldn't have a problem getting a letter from the Widow (or the acquirer on behalf of the Widow) explaining the situation and offering to act for me in the same way. If the letter had an 'opt out' mechanism and the acquirer didn't 'hound' non-responders I can't see anyone making a complaint to the ICO, or if they did the ICO thinking it was unreasonable for the widow to have tried to ensure that the clients were looked after.

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Caroline
By accountantccole
04th Dec 2019 10:19

It happens in sales all the time - surely it is better for the clients to have a continuous service with someone coming in and picking files up straight away. That is what an alternate would do.
Email/letter out to all clients from the widow explaining circumstances and her intentions to pass files to firm A (who is already assisting her with urgent work) to ensure the accounts and tax are looked after, recognising their rights to ask her to hold onto the information if they want to make alternative arrangements but highlighting that as she isn't an accountant she may not be able to provide info to a new accountant as well as firm A and there will be costs associated with handovers in this situation.
What does the professional body recommend?

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Lisa Thomas
By Insolvency Practitioner
04th Dec 2019 10:52

.

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Replying to Insolvency Practitioner:
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By bernard michael
04th Dec 2019 10:56

Insolvency Practitioner wrote:

.

As the deceased is an accountant I don't think the SRA would be interested

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Replying to bernard michael:
Lisa Thomas
By Insolvency Practitioner
04th Dec 2019 13:03

I was having a moment and deleted my post as soon as I realised, but obviously not quick enough!

Thanks

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By bernard michael
04th Dec 2019 11:53

I've now checked with the ICO. The widow does not have a data responsibility if she passes the files to another firm who will contact the clients and inform them of the position. Also they will be responsible for returning the papers if the clients do not wish to proceed with them

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By David Gordon FCCA
06th Dec 2019 11:42

If the deceased was a member of ACCA or ICAEW properly registered for practice, he had presumably advised ACCA or ICAEW of a continuity person or firm. That person has legally agreed to deal with this stuff.

If not, it is the responsibility of the executor or personal representative.
In any case the easiest way is to send each file back to the client, special delivery -because this tracked- with a polite covering letter.
Yes it will £cost but it is the cheapest quickest option.

Regularly, it is sad and perplexes me why so many of my colleagues do not believe the statistic that 100% of us are going to "Fall off the tree", and therefore do not make prudent appropriate provision for this kind of stuff.
I make allowances for clients who believe they are going to live for ever, but accountants?

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By dmmarler
06th Dec 2019 11:44

To have a licence to practice, the accountant should have notified his continuity partner to his professional body. If the widow asked, doubtless she would be told and all would run smoothly.

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By bernard michael
06th Dec 2019 11:53

He wasn't a qualified & hence not a member of a regulatory body

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By bernard michael
06th Dec 2019 14:09

Latest news:-
The prospective purchaser has decided it's too much of a problem and withdrawn We're now back with the original situation

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