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Terminated client demanding past working papers.

Terminated client demanding past working papers.

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A client who I had to terminate due to a history of abusive behaviour is now demanding my working papers for all the years that I worked for him. He is threatening legal action if they are not turned over to him within 24 hours. My understanding is that they are my property, and I have no such obligation in law. Opinions?

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By SXGuy
07th Feb 2020 18:21

I'd say I agree. I'd also say even if you were willing to hand them over, 24 hours is not long enough.

Maybe pre empt his attempt by sending him a pre action protocol letter. That's what I'd do anyway.

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Replying to SXGuy:
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By whiteways
07th Feb 2020 18:53

I’m no expert in this area, but I’m not sure that’s necessary in this case. There’s been absolutely no suggestion of anything I’ve done wrong. I think he’s simply miffed at getting terminated and he’s probably on a fishing expedition. I see no reason to assist him.

He’s also informed me that I have no right to terminate him in law, and that I have to give him at least three months notice! So you can see the type we’re dealing with!

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Replying to whiteways:
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By SXGuy
07th Feb 2020 19:24

I agree with you. The pre action protocol letter is simply just to call his bluff, and at the same time should he try any action you've shown the judge that you've set out your terms prior to any litigation.

Basically I don't think he'd follow through with it anyway but a strongly worded reply would probably put it to bed.

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Replying to SXGuy:
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By Accountant A
07th Feb 2020 20:24

SXGuy wrote:

I agree with you. The pre action protocol letter is simply just to call his bluff, and at the same time should he try any action you've shown the judge that you've set out your terms prior to any litigation.

Pre what action though? Just set out the reason why ex-client has had all he is getting and say any further contact will be reported to the police as harassment.

You could say there will be a charge of £50 for responding to any future requests and then follow that up when he doesn't pay.

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Replying to Accountant A:
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By whiteways
08th Feb 2020 12:48

Those are some great suggestions!

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Hallerud at Easter
By DJKL
07th Feb 2020 18:21

Depends if they are part of his accounting records which you created /corrected on his behalf and for which he has paid you for so doing or whether they are mere analysis of his accounting records. If actual accounting records then I believe they are his, if mere analysis of accounting records then I believe they are likely yours.

The 24 hours is probably a nonsense, even if they are his I would be hard pressed to believe a subsequent court process would consider that a reasonable request re timetable.

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Replying to DJKL:
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By whiteways
07th Feb 2020 19:04

No, he has all his records back. All I have is my office notes, schedules, TB etc. I believe they are my property, so he can’t demand them. I would naturally provide The TB and schedules for the most recent accounts I did to assist his new accountant, but that’s it.

One other point - I’ve never had to do a termination letter before in my entire career. I’m assuming I would need to give a a copy of that to the new accountant in answer to the inevitable “Are you aware of any reason why we should not accept this appointment,” question?

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By frankfx
07th Feb 2020 21:11

https://www.dacbeachcroft.com/en/gb/articles/2018/march/hand-it-over-own...

May assist your deliberations.

Stand your ground.

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Replying to frankfx:
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By whiteways
08th Feb 2020 12:48

I already read that article, but thanks!

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By gillybean04
08th Feb 2020 02:37

Be aware he could try the subject access route. But that only requires providing personal information held about an individual. So you need not supply actual documents and need not comply if it's not an individual.

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Replying to gillybean04:
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By lesley.barnes
08th Feb 2020 10:06

Agree he could try that route. Nothing to do with this matter but gives an insight to the Information commissioner's powers. I had to go down the SAR route with the NHS. After 6 months of the Information Commissioned battling on my behalf they were told that the document had been destroyed. So the IC O could do no more case closed.

Nhs policy according to what they told the ICO is that handwritten notes should be typed up on the patients records and the nurses personal notes are then destroyed. In my case the notes were not typed up and the nurse destroyed her notes because she didn't think they were relevant.

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Replying to gillybean04:
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By whiteways
08th Feb 2020 12:55

In this case I don’t think an SAR would help him because he traded as a Limited Company. He’d get copies of his personal Tax Returns, but that’d be about it.

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By Tim Vane
08th Feb 2020 03:30

If you’ve hands him his accounts and returns etc then pre-empt any further hassle by shredding the rest. Job done.

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Replying to Tim Vane:
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By thomas34
08th Feb 2020 09:14

Not sure about that one Tim - I always keep records for 6 years purely for statute of limitations reasons i.e. if any historical figures/advice are challenged I've got everything on file.

I had a similar case around 30 years ago when a sacked client threatened to sue me for compensation. I told him to go ahead if he could find what losses he'd incurred due to my actions.

I think the OP will find that it's probably the ignominy of being "sacked" that's caused the client's behaviour. I'd write one letter (and make it clear that it is the final letter) explaining what others have said about ownership of the documents.

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Replying to Tim Vane:
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By paulwakefield1
10th Feb 2020 08:25

Ahhh - the Arthur Andersen approach. Doesn't always turn out well.... :-)

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RLI
By lionofludesch
08th Feb 2020 09:34

Tell him that you look forward to hearing from his solicitors and that you'll pass on any correspondence to your solicitors.

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By bernard michael
08th Feb 2020 10:00

Re the Notice point what does your engagement letter say ?

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Replying to bernard michael:
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By whiteways
08th Feb 2020 12:57

There’s no notice period specified.

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By Paul D Utherone
08th Feb 2020 12:21

I suspect that a reference to the response in Pressdram v Arkell will probably only exacerbate the situation

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Replying to Paul D Utherone:
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By whiteways
08th Feb 2020 13:12

Probably would, but it gave me a good laugh at any rate!

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By frankfx
08th Feb 2020 16:32

http://www.lettersofnote.com/2013/08/arkell-v-pressdram.html?m=1

Essential reading.

Three hours of laughter induced CPD can be recorded with integrity.

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By paulwakefield1
10th Feb 2020 08:30

The question of ownership can be a tricky one. ICAEW guidance is here:

https://www.icaew.com/-/media/corporate/files/members/regulations-standa...?

Not that I have ever devoted a great deal of thought to it but I was surprised by how much was deemed to be the Client's.

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By whiteways
10th Feb 2020 13:14

One other point - I’ve never had to do a termination letter before in my entire career. I’m assuming I would need to give a a copy of that to the new accountant in answer to the inevitable “Are you aware of any reason why we should not accept this appointment,” question?

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Replying to whiteways:
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By lesley.barnes
10th Feb 2020 16:36

I did laugh at the question heading I bet you wished that the client was "terminated".

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By frankfx
10th Feb 2020 13:25

You are under no obligation to answer the " any reasons" question.

Leave it as a dangling debit lost in the suspense account.

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AS
By AS
10th Feb 2020 13:51

I once dismissed an abusive client. She threatened to take legal action but, since she had no grounds, she did not proceed. She then made a a fictitious complaint to ICAEW. Although the complaint had no merit, I wasted many hours responding to investigation carried out by the Institute and it took many months for them to decide that the complaint should be dismissed.

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Replying to AS:
Chris Caspell CTA TEP
By ccaspell
11th Feb 2020 11:30

I had a similar complaint made to the CIOT. It was the bookkeeper of the client who told me that I didn't know what I was talking about when I advised the client that the VAT return needed to be filed on the 7th of the month after the month following the end of the VAT quarter. When I sent her the link to the HMRC website she complained that I was being unprofessional.

While there were clearly no grounds, it still took the institute a few months to process and dismiss and I still worry when I complete my annual return whether the question "have you ever been investigated by X professional body?"

From a time and worry basis I would recommend avoiding a trip to the complaints board of any institute myself if at all possible.

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By David Gordon FCCA
11th Feb 2020 15:54

It saddens me that often my professional colleagues do not follow oft given and often mandatory advice in these situations.
The first port of call is your PI insurer. They will be pleased to advise you, in order to stop costs before they start.
PI policies require that you notify them immediately you get a sniff of a problem. Otherwise you may lose cover. Believe me they do mean "Immediately".
In any case both ICAEW and ACCA handbooks cover the question of ownership of working papers. both organisations retain staff for advising in these situations.
To my other friends and colleagues, these situations are highly combustible.
Please do not give opinions unless you are really sure, with experience, that you know what you are talking about.

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By David Gordon FCCA
11th Feb 2020 16:11

On another tack:
The whole point of a letter from new accountant to previous accountant is to pre-empt difficult situations, and 2) to prevent the erstwhile client from using the threat of "Do what I say or I change accountants".
Thankfully through my long bumpy years in practice I have only twice told a client to vanish up his own posterior.
I sent the client a carefully worded polite letter setting out why would I prefer him to go elsewhere.
I sent the proposed new accountant a reply saying I had "Professional reasons"
which had been set out in writing to the client, and that it was for the client to divulge the difference of opinion to the new accountant.

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