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1. You need advice about handling a difficult
client who threatens to sue you. We’ll provide it.
2. You lose a client to another accountant who
demands your working papers. We’ll advise you.
3. Someone reports (or threatens to report)
you to your Institute or another body. We’ll handle
it.
4. 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.
5. You need help interpreting the Institute’s
disciplinary bye-laws or members’ handbook. Our
specialists will guide you. We have six specialists – a
barrister, two solicitors and three chartered accountants.
6. You are offered a consent order by the Investigation
Committee. We’ll advise you whether to accept and
the indemnity insurance implications.
7. 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 the Institute
will take. We’ll give that advice.
8. There’s a claim under your indemnity
insurance policy and the City lawyers acting for underwriters
can’t advise you. We will.
9. 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. For instance,
with effect from 1st January 2008, ICAEW disciplinary proceedings
will be open to the public and the press. Read all about ‘Accountant's
shame’ in next Thursday’s issue of Accountancy Age!
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 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 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' disciplinary
hearing advice. 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.
- 45% of chartered accountants
do not appear at their disciplinary hearing.
- And do not obtain accountants'
disciplinary hearing advice.
- Many disciplined accountants
do not obtain legal representation or advice.
- Between June 2005 and December
2006, only 26% of chartered accountants were 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 can also be costly.
Minimum likely to be £2,000 plus VAT.
- A straightforward case involving
a guilty plea with legal representation could cost upwards
of £4,000 plus VAT.
- A defended case involving technical
evidence, expert witnesses and counsel could cost over
£10,000 plus VAT.
- In addition, if found guilty,
the practitioner is likely to be fined and must pay costs.
- In 2006 the average fine and
costs imposed by the Investigation Committee at ICAEW
was £6,000.
- In 2006, the average fine and
costs imposed by the Disciplinary Committee at ICAEW was
£6,500.
And then there are the knock-on
effects of a disciplinary conviction.
- Your reputation could be seriously
affected.
- There may be problems when you
come to renew your indemnity insurance.
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Stress – Legal representation
can alleviate some of the stress.
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 a 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 advice would have addressed these
issues.
The Investigation Committee at ICAEW offers
consent orders which the member can accept or reject. If he rejects,
the case goes 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.
Accountants' disciplinary hearing advice before a case is referred
to the Investigation Committee could influence the outcome. Legal
advice should always be obtained before a consent order is accepted.
In 2006, the Investigation Committee made over
50 consent orders, imposing fines (just under £3000) and
costs (just over £3000) in most cases.
ACCA has abolished consent orders. Cases go
directly to the ACCA's 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 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 legal advice 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 accountants' disciplinary
hearing advice 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 immediate advice
from our team of specialists.
Annual subscription for a sole practitioner
- £170 plus VAT for all practising qualified
accountants.
We offer a lower per capita subscription for non sole practitioners,
depending upon size of firm.
For complaints, regulatory, disciplinary
and appeal cases, Accountants' Defence will underwrite legal and
professional fees up to a maximum of £10,000 plus VAT. If
the costs exceed £10,000 (very unusual in our experience),
these must be borne by the member.
- Assisting members respond to an investigation
or complaint.
- Accountants' disciplinary hearing advice
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 advise/assist with a complaint
before the professional body becomes involved.
- Legal representation before regulatory,
disciplinary and appeal tribunals.
- 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.
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We acknowledge that the rules and regulations
of the ICAS, and its disciplinary procedures, differ from those
of the ICAEW, ACCA and CIOT. Nevertheless, we are familiar with
the workings of the ICAS. Christopher Cope has represented a number
of members of the Scottish Institute in both complaint investigations
and before the Discipline Committee. The cost of our advocates
and experts travelling to the Scottish Institute will be met by
Accountants' Defence.
Most policies will not provide cover for legal
fees on complaints and disciplinary cases, unless it is clear
that a complaint is likely to lead to a claim. In those circumstances,
underwriters have a discretion whether to instruct panel solicitors
(or those of your choice who will be expected to have specialist
skills) to advise/assist with regard to the complaint investigation.
Where there is little or no likelihood of a claim, your PII policy
normally will not help you. Accountants' Defence can, though,
help; that's why we were established.
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.
Professional conduct is a speciality. Few UK
lawyers have the experience of investigating and prosecuting accountants
gained by Christopher Cope at the ICAEW from 1976-1983. Furthermore,
no UK lawyers have represented more accountants before disciplinary
tribunals than Christopher Cope (over 300 cases to date). 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 arranges for counsel to handle
the advocacy.
It is essential, therefore, to instruct the experts for accountants'
disciplinary hearing advice. Every member of our team has considerable
experience and expertise - that's why we selected them.
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 recently learnt of many householders flooded out by
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 advice 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 and the Money Laundering regulations
continue to cause problems for practitioners. Accountants' Defence
can help.
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 legal advice about his interests (for instance preparing
a written response to the City lawyers), he should consult Accountants'
Defence. We will provide advice and assistance. Moreover, we will
underwrite the member’s legal fees up to £2,500. In
this way, we hope to provide wise counsel and helpful assistance.
For instance, PI insurers might attempt to avoid liability. We
are there to advise 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 a complaint or disciplinary proceedings and
to provide accountants' disciplinary hearing advice.
- 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 your’s.
- 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. However, we will offer advice.
- Accountants' Defence can assist with
regard to negligence claims. 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.
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