CH7 - Other client handling issues

Question 1

Disclosing information to other 3rd parties- potential risks

Answer 1

Breach of confidentiality
Unintended consequences for the client
A claim against a member from a 3rd party

Question 2

How to mitigate risks from 3rd party liability

Answer 2

Inclusion of statement that info prepared for client and no liability to other parties relying on it
Ensure client seeks consent before releasing information to 3rd parties
Obtaining written confirmation from 3rd party that member will be held harmless as consequence of making info available
Communicating to 3rd party terms on which info made available and any limitations on scope
Reliance on disclaimers already provided in original information
Seek indemnity from client in respect of any claims made against member by 3rd parties
Decline to provide info requested

Question 3

If owe a duty of care to 3rd party then manage with contractual arrangements

Answer 3

Aim to seek clarity by:
Binding 3rd party to terms of original engagement letter
Issue a separate engagement letter between member and 3rd party

Question 4

Managing client needs

Answer 4

If member does not have expertise available to meet clients needs, act appropriately to situation
If making a referral, need to ensure client is aware that the member has no responsibility and the client had a decision as to whether to engage with the party referred

Question 5

Working ALONGSIDE other prof advisers

Answer 5

If any other advisers involved, define clearly the areas of responsibility and record this in engage letter
Maintain client confidentiality

Question 6

Working in a subcontractor relationship WITH another prof adviser

Answer 6

Written record of agreement between 2 parties
Lead adviser will remain responsible to the client for all of services
Write this in engage letter
Will the subcontractor directly contact the client or will they be behind the scenes?
Consider PII and AML
Is there the ability to share information between advisors?

Question 7

Clients money

Answer 7

Member should give careful consideration before agreeing to hold clients money
Consider money laund legislation when allowing money to be passed through client account
Client money must be kept separate from money belonging to firm, and kept in a separate client account
This bank account MUST include the word ‘client’ in the name of the account
May have a seperate account for each client, or one for all

Question 8

Following conditions apply for client accounts

Answer 8

Banks must be made aware that no right of set-off and must acknowledge in writing
Client accounts must be interest bearing unless amounts are small
Funds should only be used for designated purposes
If funds received which comprise client and member funds, must pay initially into client account
Client funds should never be paid into members account
If amount is >10,000 or held for more than 30 days, seperate account for that client
6 monthly reconciliations and records to be obtained for at least 6 years FROM DATE OF FINAL TRANSC RECORDED IN RECONCILIATION

Question 9

Tribunals and advocacy

Answer 9

A member can represent a client before First-Tier Tax Tribunal and Upper Tribunal
But the member must have the relevant expertise and experience
Even if have relevant expertise and exp, may be preferable for a solicitor or someone with a High Court advocacy certificate to be briefed