CH8- Charging for services

Question 1

Before accepting work

Answer 1

Before accepting work, client must clearly understand basis on which fees are charged
Set out basis in letter of engagement
Should make it clear whether you are charging for initial meeting or not

Question 2

Basis of charge

Answer 2

Time and expenses- charge on basis of time spent, or charge more for urgent deadlines
Fixed fees- should be based on a clear scope. If scope of work more than 1 year, include a provision to charge more if changes in scope and cost escalations
Contingent fees
Insurance- in some cases, fees may be covered in whole or part by professional fee insurance

Question 3

Fee notes

Answer 3

Agree fees before issuing fee notes
Fee note need not to be fully detailed unless client has requested
Issue fee notes without undue delay and a member should issue regular fee notes to client
Records should be adequate to enable a fully detailed fee note to be prepared at a later date if required

Question 4

Contingent fees

Answer 4

Increased risks- could impact integrity and objectivity
There are legal/regulatory restrictions to having a contingent fee
Engagement letter should set out scope of work
Set out action to be taken if subsequent events cancel all or part of the benefits to the client

Question 5

Commission

Answer 5

If commission is payable to another party, the client should be advised
Let client know the relationship and amount of commission
Member still needs to be independent and objective
Further regulatory requirements may apply

Question 6

Retainer arrangements

Answer 6

A member may charge, or accept, fees from a client simply for the retention by that client of a member’s services, whether or not additional fees will be charged for specific services which may subseq be rendered
Set out in writing- should clearly understand extent and limitations of arrangement
Ensure mechanism to be able to bring arrangement to end if needed

Question 7

Payments on account/in advance

Answer 7

Terms of such payments should be included in engagement letter
Substantial payments in advance may impact a members independence/objectivity
Ensure VAT is correctly accounted for on such amounts

Question 8

Slow paying clients

Answer 8

Try to understand reasons behind delay
May need to consider legal action to recover amounts due
If decide to stop working for client, give reasonable notice
If holding client funds, cannot use these to settle outstanding fees unless client agrees
If offer opportunity to settle by way of instalments, provisions of consumer credit act 1974 may apply

Question 9

Fee disputes

Answer 9

Try to settle by discussing with client
May need to advice professional indemnity insurance provider
ATT/CIOT will not arbitrate in fee disputes
Seek legal advice before exercising any right of lien

Question 10

Lein

Answer 10

The legal right to retain possession of a property until a FINANCIAL claim that the holder of the property had against its owner has been met