The lines between professional and personal blurred in an ICAEW disciplinary tribunal case where an accountant admitted acting inappropriately in accepting gifts from his client worth £89,000.
Accountant Christopher Salmon received a severe reprimand and was ordered to pay costs of £19,314 and a fine of £4,000 after an ICAEW tribunal found that his judgment was “clouded” due to the friendship he developed with a client.
Salmon originally assisted the client with the preparation of his tax returns and later with the organisation of his general financial affairs. But the two soon struck up a friendship that extended beyond the normal accountant-client relationship and saw the client lavish Salmon with gifts totalling £89,000 from July 2004 to November 2009.
And then, shortly before the client passed away in June 2010, the disciplinary tribunal heard how Salmon advised his client to transfer the ownership of his £600,000 commercial property into the name of an LLP – of which Salmon was a member.
Although the client was described “as sharp as a tack” until his death, Salmon accepted that he had not advised the client to take independent legal advice about the transaction. The client instructed Salmon and his solicitor before his death not to register the transfer, but the solicitor did it anyway. However, there was no loss to the estate.
At the disciplinary tribunal, Salmon accepted that he should have dealt with the situation in a “more appropriate and transparent manner”.
The tribunal considered mitigating factors such as the accountant’s 20-year ICAEW membership and his belated remorse, which satisfied the tribunal that his conduct swayed more towards “serious” rather than “very serious”.
“In acting in the way in which he had, the defendant had breached the position of trust that he found himself in and his independence and objectivity had fallen well below the standard expected of someone in his position,” the tribunal concluded about Salmon’s conduct in respect of both the gifts and the transaction.
But Salmon’s late admission also went some way in reducing the fine from £5,000 to £4,000, but he was still left to pay costs in the sum of £19,314.
The only point which troubles me is in respect of the costs of £19,314. The case was concluded in a day. The investigation ought not to have been particularly time-consuming.Mr Salmon appears to have accepted that he had acted inappropriately at an early stage. Furthermore, he did not contest the proceedings. How, therefore, has the ICAEW incurred costs in excess of £19,000, especially regarding a case which dates back some 10-15 years.
Mr Salmon was legally represented. The record states that no submissions were made on behalf of Mr Salmon concerning the figure of £19,314. Well, why not? A lawyer has a duty to his client to make representations on costs sought by the regulator, particularly where the figure is high.
Of course, there is no guarantee that the tribunal having heard submissions will reduce the amount of costs sought. Nevertheless, the defence lawyer must at least try to get these reduced.
There is often duplication with more than one employee being involved in the case investigation. Sometimes, the time spent is clearly excessive, particularly with regard to preparation time and perusing of documents.
I find that, generally, following detailed representations, the tribunal will make a reduced costs order.