7. PRPG: Other Client Handling Issues

Question 1

A member will have a ________ ________ under the engagement letter

1. legal obligation
2. contractual obligation
3. confidentiality obligation

Answer 1

2. contractual obligation

Question 2

A member should be careful not to inadvertently assume a duty of care towards a third party. A member may manage this risk by: (4)

Answer 2

• Including a caveat or clause in the Letter of Engagement stating that the infomation and services is limited to the client and will not hold any liability to third parties who use it.
• Requiring the third party to state, in writing, that the member is not responsible and excluded from liability of making information available to them
• Seeking an indemnity from the client in any respect of any possible claim against a member by the third party.
• Declining to provide the information.

Question 3

If you find it may be appropriate to provide a duty of care to the third party, how might you manage this? (2)

Answer 3

1. Binding the third party to the original engagement letter

2. Creating a separate agreement tailored for the situation

Question 4

Steps to take when subcontracting work for a client: (3)

Answer 4

1. Should always let the client know
2. Written agreement between the two parties
3. The lead adviser will remain responsible to the client

Question 5

When working AS a subcontractor, what should you be aware of? (2)

Answer 5

AML and PII obligations

Question 6

what two things must a client bank account have/be?

Answer 6

1. interest bearing deposit/current account

2. have the word ‘client’ on the title of the account

Question 7

when should money be put into a SEPARATE interest bearing bank account? (2)

Answer 7

When it is either:
1. over £10,000
2, Will be held for over 30 days

Question 8

how often should client account be reconciled? and how long should records be kept for?

Answer 8

6 months and records kept for at least 6 years from the date of last transaction

Question 9

Things to remember about Tribunals… (2)

Answer 9

1. If a member feels they are not competent enough to perform, they should not undertake work until they have obtained appropriate advice/assistance
2. If a case becomes complex or the tax amount at stake is high or envolves tax evasion, consider seeking help from a professional with a high court advocacy certificate.