You are a sole practitioner or a partner/director of a firm having up to 12 partners/directors. You believe that the firm may be exposed to an investigation by your regulator where the cost has to be met by the firm. You are anxious that these costs could be considerable. You have considered your PII policy and do not believe that that provides the same cover as is available from Accountants’ Defence. Nor do you have specific legal fees insurance. It’s not that you believe that the firm will become subject to a complaint. However, on the other hand, you accept that, at some stage, you and/or your partners/directors may fall out with a client or a third party and that a complaint could follow. You may also want to consult an advisory service on technical, ethical and legal problems, when such services are not available from your regulator, or maybe they are, but you would rather not discuss your problems with the regulatory body. So you are looking at membership of Accountants’ Defence and want to know what we can do for you.
You need advice about handling a difficult client who threatens to sue you. We’ll provide it.
You lose a client to another accountant who demands your working papers. We’ll advise you.
Someone reports (or threatens to report) you to your Institute or another body. We’ll handle it.
Your explanation is rejected and you must appear before an Institute committee. You’ll be represented by an expert lawyer and we’ll meet his costs.
You need help interpreting your Institute’s disciplinary bye-laws or members’ handbook. Our specialists will guide you. We have eight specialists – a barrister, three solicitors, three chartered accountants and SWAT.
You are offered a consent order by the Investigation Committee. We’ll advise you whether to accept and the indemnity insurance implications.
A company in which you were a non-executive director is insolvent. Directors Disqualification Act proceedings have been brought. Your solicitors are advising on a Carecraft Settlement. They know nothing about what action your Institute will take. We’ll give that advice for accountants.
There’s a claim under your indemnity insurance policy and the City lawyers acting for underwriters can’t advise you. We will as we’re here to provide guidance for accountants.
There’s a threat to your audit/insolvency/financial services licence. We’ll protect your interests.
Although you are unlikely to be complained about or disciplined, no one can guarantee this. You cannot expect to survive 40 years in practice without having a disagreement with a client or some third party such as another accountant or a solicitor. Some clients are unreasonable and will insist on a complaint being pursued to committee, even if the case manager at your professional body disagrees with the complainant.
A case manager can raise his own complaints, additional to those made by the complainant, which you must answer. It is a requirement that you must answer a complaint within 14 days and that disciplinary proceedings must take priority over everything else. Would you have the time to respond, particularly in the month of January?
The world in the 21st century is far more contentious than it was 30 years ago. The public is well informed. People know their rights. They are far more willing to complain than ever before, particularly if they think they will receive a large cheque at the conclusion. Due to political and public pressure, professional bodies are forever taking steps to expand and toughen their rules and regulations. All disciplinary proceedings are now open to the public and the press. The Institutes will and do take tough action against transgressors.
Shortly after we set up Accountants’ Defence in January 2004, a solicitor colleague tried to persuade a certified accountant friend to take out a subscription. The certified accountant (a sole practitioner) said that he thought that spending £150 a year on a subscription (it is a bit more now) to an advisory service was a waste of money as he had never had a complaint in his life and did not expect to receive one. He did not take out membership. A couple of months later, he was reported to the ACCA by another accountant. Much to the certified accountant’s surprise, he was referred to the ACCA Disciplinary Committee. On advice, he pleaded guilty to the charge. The charge related to whether or not he was entitled to retain papers belonging to a client, following a change in accountants. He was legally represented before the Disciplinary Committee. The legal fees which he incurred were £1,500, 10 times the subscription he would have paid in January 2004 and which would have ensured free representation. (Today, his legal fees would have been substantially greater).
Set up to help accountants in practice who get into difficulty and to provide accountants with advice on disciplinary hearings. In disciplinary proceedings, many accountants are failing to act in their best interests or take adequate care of their own affairs. Even if the dispute with the client never reaches the professional body, we will provide advice and assistance.
Nearly 60% of accountants subject to a complaint do not appear at the Disciplinary Committee.
Nor do they obtain advice on disciplinary hearings.
Only just over 20% of accountants are legally represented.
Appearing before a disciplinary tribunal is a stressful experience.
Few accountants have experience of advocacy.
Those that do, find it difficult to be an effective advocate in their own cause.
Preparing your own case is time-consuming and costly.
Legal advice/representation can also be costly. Minimum likely to be £5,000 plus VAT.
A straightforward case involving a not guilty plea with legal representation could cost £10,000 plus VAT.
A defended case involving technical evidence, expert witnesses and counsel could cost over £20,000 plus VAT.
In addition, if found guilty, the practitioner is likely to be fined and must pay costs.
The average fine and costs imposed by the ICAEW Investigation Committee is £5,000 excluding insolvency cases which incur low costs and no fine. The ACCA no longer has an Investigations Committee.
The average fine and costs imposed by the ICAEW Disciplinary Committee is £6,500. ACCA similar.
A member of ACCA wishing to appeal a decision of an ACCA Disciplinary Committee must obtain permission to appeal.
And then there are the knock-on effects of a disciplinary finding.
Your reputation could be seriously affected.
There may be problems when you come to renew your indemnity insurance.
Stress – Legal representation can alleviate some of the stress. All disciplinary cases are prosecuted by lawyers, usually very experienced barristers.
Experience – An experienced lawyer will have appeared before a tribunal on many occasions.
Objectivity – The lawyer will bring objectivity to the case.
Preparation – In preparing the case, lawyers know what matters and what does not. They will focus on relevant issues and avoid protracted correspondence.
Cost – And if you are a member of Accountants’ Defence, it could cost you nothing apart from your annual subscription.
Without effective representation at all stages of a complaint, many have suffered unnecessary damage to their reputation. Some have received substantial fines, which could have been avoided. Some have even lost their qualification and livelihood – possibly avoidable. Some, having failed to contest the disciplinary proceedings, have subsequently been unable to defend an interconnected civil action. Others have been unable to obtain insurance cover as a result of a disciplinary finding or had to pay a massively increased premium. Professional accountancy advice would have addressed these issues. You have nothing to lose by obtaining guidance.
The ICAEW Investigation Committee offers consent orders which the member can accept or reject. If he rejects, the case is referred to the Disciplinary Committee. Consent orders are no different from disciplinary findings. All attract publicity. As Consent Orders are admissions of liability, there can be serious professional indemnity insurance implications. Insurers’ approval must be obtained before a consent order is accepted. Advice before a case is referred to the ICAEW Investigation Committee could influence the outcome. Professional advice for accountants should always be obtained before a consent order is accepted.
The ICAEW Investigation Committee makes over 100 consent orders every year and imposes fines and costs in most cases.
ACCA has reintroduced consent orders. Alternatively, cases go directly to the ACCA Disciplinary Committee unless the Assessor (there is no longer an Investigations Committee) decides that the case should ‘rest on file’.
Not every case requires legal representation. But legal advice for accountants can be important at certain stages. Don’t forget that a complaint may be the forerunner to a claim. A mark of disapproval by the professional body could help in securing financial compensation against you. You will have to spend time dealing with a complaint. A complaint is often an attempt to avoid payment of fees. You do not want to lose all or part of your fee as well.
If the practitioner believes that he is innocent, he would be unwise to admit the complaint. Get professional advice for accountants beforehand. Even when pleading guilty, a good plea in mitigation could prevent exclusion or reduce the size of fine. Accountants’ Defence was established with the aim of providing sound advice on accountants’ disciplinary hearings and effective representation at no cost to the member.
But we do more than assist our members when complaints are made. If a member has a difficult client and believes this could lead to a claim, a complaint or legal proceedings, we will advise him. And what should a member do when he’s lost a client to another firm and receives a professional enquiry letter demanding all his working papers, plus files going back six years and threatening to report matters if they do not receive his full cooperation within seven days? The guidelines may appear confusing. A call to our hotline will result in guidance for accountants from our team of specialists.
Why should this service be of interest outside England/Wales, ie to members of the ICAS?
We acknowledge that the rules and regulations of the ICAS, and its disciplinary procedures, differ from, for example, those of the ICAEW, ACCA and CIOT Disciplinary Committees. Nevertheless, we are very familiar with the workings of ICAS. Chris Cope has represented a number of members of the Institute of Chartered Accountants of Scotland in both complaint investigations and before the ICAS Discipline Tribunal. The cost of Chris Cope travelling to the Institute of Chartered Accountants of Scotland will be met by Accountants’ Defence. However, in all cases before the Discipline Tribunal at ICAS, we will arrange representation by Scottish counsel (and the cost will be met by us).
Annual subscription for a sole practitioner – £225 plus VAT for all practising qualified accountants.
However, in the first year of membership or part (as applicable), we offer a 50% discount on subscriptions.
We offer a lower per capita subscription for non sole practitioners, depending upon size of firm.
Complaints, regulation, disciplinary and appeal proceedings in respect of the following professional bodies:-
ICAEW (Institute of Chartered Accountants in England and Wales).
ACCA (Association of Chartered Certified Accountants).
ICAS (Institute of Chartered Accountants of Scotland).
CIOT (Chartered Institute of Taxation)/ Taxation Disciplinary Board.
CIMA (Chartered Institute of Management Accountants).
CIPFA (Chartered Institute of Public Finance Accountants).
APA (Association of Public Accountants).
For regulatory, disciplinary and appeal cases, Accountants’ Defence will underwrite legal and professional fees up to a maximum of £25,000 plus VAT. If the costs exceed £25,000 (unusual in our experience), these must be borne by the member.
In respect of complaints (up to and including the involvement of the Investigation Committee), the cost of the time involved by our directors will be borne by Accountants’ Defence. If an expert or counsel has to be engaged, Accountants’ Defence will underwrite fees up to £5,000.
Assisting members respond to an investigation or complaint.
Advising accountants by telephone, in writing or at a meeting.
Corresponding with the professional body, where appropriate.
We will take such action as soon as a complaint is made and once we have your instructions.
We will give advice to accountants with an in-house complaint before the professional body becomes involved.
Legal representation before regulatory, disciplinary and appeal committees.
Where a disciplinary case is defended, representation by experienced counsel.
In a defended case, conference with counsel.
If required, engaging an expert to give evidence.
Access to Accountants’ Defence team of professional specialist advisers.
Some PII policies provide cover for complaints or disciplinary cases. Others make it clear that cover is only provided if the complaint is likely to lead to a claim. Whereas underwriters have a discretion whether to instruct panel solicitors, the Insurance Companies (Legal Expenses Insurance) Regulations 1990 (paragraph 6.1) specifically enable the insured to choose his own lawyer, provided that he/she has the necessary experience/expertise to handle the matter. Your insurers can only insist that you instruct one of their panel solicitors if it is certain that the complaint (if upheld) will lead to a claim for negligence under your PII policy. If in doubt, or your brokers/insurers appear unhelpful, let us know and we will advise at no expense to you. Always check the wording of your policy thoroughly.
Generally, it cannot advise you if it is carrying out an investigation into your conduct. However, it can – and will – provide technical advice. If you are not satisfied with the advice received from your professional body, or would rather not approach them, speak to us. We are here to provide guidance for accountants.
Professional conduct is a speciality. Few UK lawyers have the experience of investigating and prosecuting accountants gained by Chris Cope at the ICAEW from 1976-1983, running an advisory service for accountants (1984-1987) and as a practising solicitor (1988-2013) when he specialised in defending accountants. All practising solicitors must notify their indemnity insurers of the areas of law in which they intend to practise. As the average High Street solicitor will rarely be approached to handle a matter of professional discipline, he will almost certainly have no PI cover in respect of any disciplinary work he decides to accept on a one-off basis, even if he instructs counsel to handle the advocacy.
It is essential, therefore, to instruct the experts for advice on disciplinary hearings. Every member of our team has considerable experience and expertise – that’s why we selected them. Providing guidance for accountants is their speciality
Everyone who owns a house is insured against fire and theft. No one expects a fire or to be burgled, but no one can guarantee that it will never happen. Although household insurance can be expensive, you would be most unwise not to arrange cover on the basis that you are unlikely to be making a claim. Sadly, we frequently learn of many householders flooded out following heavy rain who had not arranged contents insurance because they didn’t believe they were at risk from floodwater. Membership of Accountants’ Defence is your way of protecting yourself against that future nasty problem you could never have anticipated. We are not, though, an insurance company.
Initial free telephone guidance for accountants on practice problems. Thereafter, the adviser will charge the member at an hourly rate for technical advice (for instance, practice assurance issues, audit opinions, client money regulations and changes in professional appointments). Practice Assurance, the client money regulations and the Money Laundering regulations continue to cause problems for practitioners. Accountants’ Defence can help. We provide advice for accountants.
If a member is subject to a negligence claim, he will advise his professional indemnity insurers who will, undoubtedly, instruct large City solicitors. They will have immense experience. However, their role is to protect the interests of insurers. That may conflict with the interests of the member. If the member needs independent professional advice about his interests (for instance preparing a written response to the City lawyers), he should consult Accountants’ Defence. We will provide advice for accountants and assistance. In this way, we hope to provide wise counsel and helpful assistance. For instance, PI insurers might attempt to avoid liability. We are here to provide guidance for accountants in such circumstances.
Members will receive a quarterly newsletter (Lifeline) dealing with professional conduct and technical issues, including case studies.
In common with other professional defence organisations, Accountants’ Defence does not provide insurance services. Accordingly, Accountants’ Defence cannot guarantee provision of services in each and every case or that it will always provide a service without limit of time or expense.
The Accountants’ Defence board of directors will decide whether an applicant should be admitted to membership.
The board will decide what service can be provided and if so, on what terms.
The board of directors may cap the level of fees or expenses to be incurred.
The decision of the board of directors will be at its absolute discretion.
Nevertheless, Accountants’ Defence will endeavour to respond effectively to every member concerning an accountancy complaint or accountant’s disciplinary proceedings and to provide guidance for accountants.
Accountants’ Defence will only accept partners or directors as members. We cannot enrol employees of professional firms.
We cannot assist non-members who happen to be partners or fellow directors of yours.
We will assist the firm (without additional subscription) if all partners/directors are members.
Accountants’ Defence will not advise or assist members in connection with civil or criminal proceedings.
Accountants’ Defence can assist with regard to negligence claims, but we do not provide cover. Your professional indemnity insurers should always be contacted in the event of a claim, or an indication that a claim is being considered.
Accountants’ Defence will not, of course, cover you for the fine and costs you may have to pay to your professional body. That is down to you.