Taking accountant to court
Discussion
I run a small Ltd company and used an accountant for 7 years without incident until the beginning of this year when they were acquired by another company.
At this point- their service absolutely dropped off a cliff. Almost all my emails were ignored and they failed to do my payroll, VAT calculations, resulting in a couple of fines/ warnings from HMRC. This has also affected scores of their other customers and is well publicised.
So I switched to a new accountant in June and requested a handover.
The old accountants have ignored well over 10 requests from me and my new accountant over the last 5 months for the following basic information- they also refuse to return my calls.
-A copy of the last completed accounts
-A copy of the Trial Balance with an analysis of the Balance Sheet
-A copy of the bank reconciliation.
-A copy of the Fixed Asset Register.
-A copy of the last agreed corporation tax computation.
-Capital allowances computations with detailed tax written down values
-Schedules relating to all allowable losses
Although I know my balances are healthy overall they are effectively putting my company at risk and have caused me undue stress and many lost hours chasing them / trying to make sense of my detailed accounts.
At this point I have no hesitation in taking them to court, but as I have an open issue with them how can I quantify the value of my claim?
I could ask for a refund of their fees from the point of the takeover and maybe calculate the number of hours I've spent chasing them X my hourly rate, but that still won't rectify the situation. They have failed to provide a service and by witholding my accounting information, they are preventing my new accountant from providing theirs. I need them to provide the information I paid them for.
What recourse do I have? What would you legal/ accounting types recommend? personally I'm more than willing to name and shame although I don't believe forum rules allow - in any case it's a well documented f'up.
Thanks in advance.
At this point- their service absolutely dropped off a cliff. Almost all my emails were ignored and they failed to do my payroll, VAT calculations, resulting in a couple of fines/ warnings from HMRC. This has also affected scores of their other customers and is well publicised.
So I switched to a new accountant in June and requested a handover.
The old accountants have ignored well over 10 requests from me and my new accountant over the last 5 months for the following basic information- they also refuse to return my calls.
-A copy of the last completed accounts
-A copy of the Trial Balance with an analysis of the Balance Sheet
-A copy of the bank reconciliation.
-A copy of the Fixed Asset Register.
-A copy of the last agreed corporation tax computation.
-Capital allowances computations with detailed tax written down values
-Schedules relating to all allowable losses
Although I know my balances are healthy overall they are effectively putting my company at risk and have caused me undue stress and many lost hours chasing them / trying to make sense of my detailed accounts.
At this point I have no hesitation in taking them to court, but as I have an open issue with them how can I quantify the value of my claim?
I could ask for a refund of their fees from the point of the takeover and maybe calculate the number of hours I've spent chasing them X my hourly rate, but that still won't rectify the situation. They have failed to provide a service and by witholding my accounting information, they are preventing my new accountant from providing theirs. I need them to provide the information I paid them for.
What recourse do I have? What would you legal/ accounting types recommend? personally I'm more than willing to name and shame although I don't believe forum rules allow - in any case it's a well documented f'up.
Thanks in advance.
GuigiaroBertone said:
I run a small Ltd company and used an accountant for 7 years without incident until the beginning of this year when they were acquired by another company.
At this point- their service absolutely dropped off a cliff. Almost all my emails were ignored and they failed to do my payroll, VAT calculations, resulting in a couple of fines/ warnings from HMRC. This has also affected scores of their other customers and is well publicised.
So I switched to a new accountant in June and requested a handover.
The old accountants have ignored well over 10 requests from me and my new accountant over the last 5 months for the following basic information- they also refuse to return my calls.
-A copy of the last completed accounts
-A copy of the Trial Balance with an analysis of the Balance Sheet
-A copy of the bank reconciliation.
-A copy of the Fixed Asset Register.
-A copy of the last agreed corporation tax computation.
-Capital allowances computations with detailed tax written down values
-Schedules relating to all allowable losses
Although I know my balances are healthy overall they are effectively putting my company at risk and have caused me undue stress and many lost hours chasing them / trying to make sense of my detailed accounts.
At this point I have no hesitation in taking them to court, but as I have an open issue with them how can I quantify the value of my claim?
I could ask for a refund of their fees from the point of the takeover and maybe calculate the number of hours I've spent chasing them X my hourly rate, but that still won't rectify the situation. They have failed to provide a service and by witholding my accounting information, they are preventing my new accountant from providing theirs. I need them to provide the information I paid them for.
What recourse do I have? What would you legal/ accounting types recommend? personally I'm more than willing to name and shame although I don't believe forum rules allow - in any case it's a well documented f'up.
Thanks in advance.
Contact their regulatory body? At this point- their service absolutely dropped off a cliff. Almost all my emails were ignored and they failed to do my payroll, VAT calculations, resulting in a couple of fines/ warnings from HMRC. This has also affected scores of their other customers and is well publicised.
So I switched to a new accountant in June and requested a handover.
The old accountants have ignored well over 10 requests from me and my new accountant over the last 5 months for the following basic information- they also refuse to return my calls.
-A copy of the last completed accounts
-A copy of the Trial Balance with an analysis of the Balance Sheet
-A copy of the bank reconciliation.
-A copy of the Fixed Asset Register.
-A copy of the last agreed corporation tax computation.
-Capital allowances computations with detailed tax written down values
-Schedules relating to all allowable losses
Although I know my balances are healthy overall they are effectively putting my company at risk and have caused me undue stress and many lost hours chasing them / trying to make sense of my detailed accounts.
At this point I have no hesitation in taking them to court, but as I have an open issue with them how can I quantify the value of my claim?
I could ask for a refund of their fees from the point of the takeover and maybe calculate the number of hours I've spent chasing them X my hourly rate, but that still won't rectify the situation. They have failed to provide a service and by witholding my accounting information, they are preventing my new accountant from providing theirs. I need them to provide the information I paid them for.
What recourse do I have? What would you legal/ accounting types recommend? personally I'm more than willing to name and shame although I don't believe forum rules allow - in any case it's a well documented f'up.
Thanks in advance.
Is the firm a regulated member of a professional accountancy body? If ICAEW, can try here https://www.icaew.com/regulation/complaints-proces...
If it’s all going very wrong they are no doubt being inundated with emails and requests. Keep the pressure on.
Is that the original accountants who are Icaew or the company that took over your old accountants?
From Icaew. I’ve had to look recently too!
Paragraph R320.7C of the ICAEW Code of Ethics requires existing accountants to deal promptly with any reasonable request for the transfer of records. The existing accountant may however have the right of a particular lien where there are outstanding fees, further guidance on which can be found in the Exercising liens helpsheet.
The purpose of exercising a lien is to assist prompt settlement from a slow client and not to exact payment from a client who has a genuine dispute over fees. An existing accountant is required by paragraph R330.11 of the code to take reasonable and prompt steps to resolve any dispute. Where the existing accountant is an ICAEW member, you may wish to refer the prospective client to ICAEW’s guidance on Fee disputes.
Where you ask the existing accountant for information as to the client’s affairs, the existing account is obliged by paragraph R320.7D to provide such information if lack thereof might prejudice the client’s interests and the client is unable to provide the information themselves. There is no obligation to provide information that has already been provided to the client and is therefore available from them. Although the contents of a file may include documents owned by the existing accountant rather than the client (see Documents and records: ownership, lien and rights of access), information from such documents may still need to be provided.
Is that the original accountants who are Icaew or the company that took over your old accountants?
From Icaew. I’ve had to look recently too!
Paragraph R320.7C of the ICAEW Code of Ethics requires existing accountants to deal promptly with any reasonable request for the transfer of records. The existing accountant may however have the right of a particular lien where there are outstanding fees, further guidance on which can be found in the Exercising liens helpsheet.
The purpose of exercising a lien is to assist prompt settlement from a slow client and not to exact payment from a client who has a genuine dispute over fees. An existing accountant is required by paragraph R330.11 of the code to take reasonable and prompt steps to resolve any dispute. Where the existing accountant is an ICAEW member, you may wish to refer the prospective client to ICAEW’s guidance on Fee disputes.
Where you ask the existing accountant for information as to the client’s affairs, the existing account is obliged by paragraph R320.7D to provide such information if lack thereof might prejudice the client’s interests and the client is unable to provide the information themselves. There is no obligation to provide information that has already been provided to the client and is therefore available from them. Although the contents of a file may include documents owned by the existing accountant rather than the client (see Documents and records: ownership, lien and rights of access), information from such documents may still need to be provided.
Edited by Puzzles on Monday 23 December 18:04
Have they ever actually done the things you're asking for? And have you ever actually paid them for doing it?
If not, you're almost certainly better off just starting from scratch with the new accountant. You must surely have some previous records to hand (after all, you give the information to the accountant) and any statutory history will be available from Companies House.
In my experience the regulatory body is completely indifferent unless there's actually been theft of money. I had an accountant who simply abandoned a company liquidation part way through. Regulatory body couldn't give a damn. Since I knew all the figures were done correctly we just sat back and waited for Companies House to get bored and strike the company off the register. Not ideal but at least we didn't get sucked into further expense.
If not, you're almost certainly better off just starting from scratch with the new accountant. You must surely have some previous records to hand (after all, you give the information to the accountant) and any statutory history will be available from Companies House.
In my experience the regulatory body is completely indifferent unless there's actually been theft of money. I had an accountant who simply abandoned a company liquidation part way through. Regulatory body couldn't give a damn. Since I knew all the figures were done correctly we just sat back and waited for Companies House to get bored and strike the company off the register. Not ideal but at least we didn't get sucked into further expense.
Thanks for the replies- really useful info.
Yes I paid the old accountant on time in full every month without fail. The failure to honour contractual obligations is entirely one sided.
Re: starting from scratch with the new accountant I guess it's an option although may be difficult in practice. I'll mention this to the new accountant.
Yes I paid the old accountant on time in full every month without fail. The failure to honour contractual obligations is entirely one sided.
Re: starting from scratch with the new accountant I guess it's an option although may be difficult in practice. I'll mention this to the new accountant.
Forget court, it's pointless. Just contact the ICAEW.
Your new accountant can carry on without handover if need be. In terms of the info:
-A copy of the last completed accounts- Do you have a copy?
-A copy of the Trial Balance with an analysis of the Balance Sheet- Annoying not to have but much of it can be reverse engineered.
-A copy of the bank reconciliation- See above
-A copy of the Fixed Asset Register.- The most frustrating item
-A copy of the last agreed corporation tax computation. HMRC can provide this
-Capital allowances computations with detailed tax written down values- HMRC can provide this
-Schedules relating to all allowable losses- HMRC can provide this
Your new accountant can carry on without handover if need be. In terms of the info:
-A copy of the last completed accounts- Do you have a copy?
-A copy of the Trial Balance with an analysis of the Balance Sheet- Annoying not to have but much of it can be reverse engineered.
-A copy of the bank reconciliation- See above
-A copy of the Fixed Asset Register.- The most frustrating item
-A copy of the last agreed corporation tax computation. HMRC can provide this
-Capital allowances computations with detailed tax written down values- HMRC can provide this
-Schedules relating to all allowable losses- HMRC can provide this
Pursuing through court MAY give you some satisfaction but it rarely ever does - as well as providing you with months and possibly years of pain and stress. As others have said, report the firm to their governing body. I would expect that their bad behaviour has been experienced by many other clients too - so I would also expect that they may have already been reported.
If this is typical of their usual standards, they could very well be very heavilly fined by their institute and possibly even expelled.
If this is typical of their usual standards, they could very well be very heavilly fined by their institute and possibly even expelled.
Thanks all- I'll definitely go down the ICAEW route. They should and probably will be struck off, but the parent company will inevitably distance themselves from this.
Based on the above responses, it also looks like my accounting situation may not be so bad. I have paid all my taxes on the dot from the previous accounting year and my new accountant is taking it forward from here. So whilst I am in the insane situation where I don't know how much money my company has, I know it is healthy as revenue and expenses are roughly the same as last year and no money has vanished.
If you search their name on e.g. Trustpilot you'll see countless reviews that share an identical experience to mine- where clients are completely unable to get in touch with their accountant.
I know of at least one client who turned up to their offices at Everdene road in Bournemouth. I don't think he managed to gain entry. Whilst I'm very angry with them, I would never resort to physical or verbal intimidation. In any case, I'd only encounter the worker drones. The people truly responsible for this s
tshow are unlikely to be in the office.
Based on the above responses, it also looks like my accounting situation may not be so bad. I have paid all my taxes on the dot from the previous accounting year and my new accountant is taking it forward from here. So whilst I am in the insane situation where I don't know how much money my company has, I know it is healthy as revenue and expenses are roughly the same as last year and no money has vanished.
If you search their name on e.g. Trustpilot you'll see countless reviews that share an identical experience to mine- where clients are completely unable to get in touch with their accountant.
I know of at least one client who turned up to their offices at Everdene road in Bournemouth. I don't think he managed to gain entry. Whilst I'm very angry with them, I would never resort to physical or verbal intimidation. In any case, I'd only encounter the worker drones. The people truly responsible for this s
tshow are unlikely to be in the office.GuigiaroBertone said:
I know of at least one client who turned up to their offices at Everdene road in Bournemouth. I don't think he managed to gain entry. Whilst I'm very angry with them, I would never resort to physical or verbal intimidation. In any case, I'd only encounter the worker drones. The people truly responsible for this stshow are unlikely to be in the office.
Ah I see. From experience, 'contractor' style accountants provide bad service and advice. Make sure your new accountant goes over your previous advice.tshow are unlikely to be in the office.Whilst it would never happen in our business, if an ex-client turned up and politely asked for their records (and said they would wait until it was sorted, however long that would take), we'd get it sorted asap. It's only a 5 minute job. Though I appreciate you may not be able to gain access. I'm sure a new prospective client could though.
MaxFromage said:
Ah I see. From experience, 'contractor' style accountants provide bad service and advice. Make sure your new accountant goes over your previous advice.
Whilst it would never happen in our business, if an ex-client turned up and politely asked for their records (and said they would wait until it was sorted, however long that would take), we'd get it sorted asap. It's only a 5 minute job. Though I appreciate you may not be able to gain access. I'm sure a new prospective client could though.
so hypothetically if get into their offices, state my request and then set up camp- what would happen? I guess they can't physically manhandle me out of there, but surely they'd just call the police and get them to do it?Whilst it would never happen in our business, if an ex-client turned up and politely asked for their records (and said they would wait until it was sorted, however long that would take), we'd get it sorted asap. It's only a 5 minute job. Though I appreciate you may not be able to gain access. I'm sure a new prospective client could though.
GuigiaroBertone said:
so hypothetically if get into their offices, state my request and then set up camp- what would happen? I guess they can't physically manhandle me out of there, but surely they'd just call the police and get them to do it?
I'm no lawyer, but the withholding of the records is a civil matter. They are your property and they are ignoring your requests to return your property. I'm guessing if you are asked to leave and you don't that's trespass, but you are there relating to a civil matter.
No professional practice wants the police round, but they don't appear very professional.
Roll the dice...
OP,
If this was me I would get your lawyer to write a letter asking for all the stuff you want and by what date - ie 7 days, referencing where you’ve asked before. L. Send it to your contact, the senior partner and Icaew. Basic letter not too much detail - should be no more than 2 hrs work.
Also set out the extra costs you are incurring because of their breach of contract. Ie extra work by new accountant. Reserve your rights re other claims
Ask for details of the professional indemnity insurer and ask them notify your claim to their insurer.
Whilst you may have a claim against them, it’s likely more important to get on with fixing the mess and then worrying about whether to chase any losses.
If your losses are any less than 25k it probably won’t be worth getting any lawyer, let alone a decent one, to chase. But you could have a go yourself - icaew may have a compo scheme.
If this was me I would get your lawyer to write a letter asking for all the stuff you want and by what date - ie 7 days, referencing where you’ve asked before. L. Send it to your contact, the senior partner and Icaew. Basic letter not too much detail - should be no more than 2 hrs work.
Also set out the extra costs you are incurring because of their breach of contract. Ie extra work by new accountant. Reserve your rights re other claims
Ask for details of the professional indemnity insurer and ask them notify your claim to their insurer.
Whilst you may have a claim against them, it’s likely more important to get on with fixing the mess and then worrying about whether to chase any losses.
If your losses are any less than 25k it probably won’t be worth getting any lawyer, let alone a decent one, to chase. But you could have a go yourself - icaew may have a compo scheme.
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