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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3844
Experience:  Solicitors 2 years plus PQE
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My accountant has filed a "Breach of Contract" damages claim

Customer Question

My accountant has filed a "Breach of Contract" damages claim against me through county court.

I initially requested his services to prepare my small company's annual accounts and VAT returns. He asked me to send all the bank statements and invoices to him, which I did. We agreed a fee of £X for his services.

After he received all the documents, he called me for a meeting. In the meeting we had brief discussion about the approach to prepare accounts. During the meeting he said that he only will prepare annual accounts and not VAT returns we initially had agreed. We had disagreement on this point as I was not willing to pay £X only for the annual accounts.

This made him angry and threatened to teach me a lesson. At which point I left his office.

This all happened in Dec, 12 then I received an invoice from his solicitor asking for £X amount which I didn't pay.

Now I have received the official claim form.

I clearly want to defend the claim. Can you please advise on what chances I stand in defending the claim? How much details should I put in the claim response form and what should be my main argument points? Should I also file a counter claim as I had to pay urgent fee to another accountant to get my accounts prepared?

The only paperwork I ever signed was a form authorising him to be my accountant. This was never sent to HMRC and he never submitted anything to HMRC on my behalf.
Submitted: 4 years ago.
Category: Law
Expert:  Alice H replied 4 years ago.
Hello and welcome to Just Answer.

My name is XXXXX XXXXX I'm happy to help with your question today.

What exactly does he allege is the breach? What is he actually claiming for?

When you received the initial invoice why did you not dispute it?
Customer: replied 4 years ago.

What exactly does he allege is the breach? What is he actually claiming for? He is claiming that his staff spent 2 weeks in preparing the accounts the meeting was for me to "approve" the accounts. So he is claiming the agreed fee for his services which he claims he has delivered.

When you received the initial invoice why did you not dispute it? I did write multiple emails to the accountant explaining that I won't pay the fee as he never submitted any accounts to HMRC. He insisted that he had spent time preparing the accounts and it was me who didn't go back to him to collect the accounts.


Please note that in the invoice he mentions that he had agreed to submit accounts to HMRC. But in the claim he say I never went back to collect my accounts.


Expert:  Alice H replied 4 years ago.

Why do you not want to pay him for work done up to the meeting?

Do you dispute that he carried out chargeable work?
Customer: replied 4 years ago.



He didn't deliver anything in the meeting. It was just to discuss the approach/scope of the required service and to make sure he had received all the documents he needed from me.


While discussing the scope there was disagreement. He wanted to prepare only annual accounts for the agreed fee while I wanted to have both accounts and VAT returns drafted.



He claims "The defendant attended the Claimant's office on 20/12/12 and spent 2.5 hours approving the accounts. The invoice was issued on 24/12/12. The claimant arranged for the Defendant to finalise the accounts on 24/12/12 but he didn't attend. The payment remains outstanding"


My take on this is that if I had "approved" the accounts on 20th, why didn't he submit them to HMRC. Why did he need me to "finalise" them. How can he issue the invoice on the same day without me "finalising" accounts.



Expert:  Alex J. replied 4 years ago.
HiThank you for your question and welcome to Just Answer.Did the accountant send you a pre action protocol letter before action?Have you actually seen the work he has done to date?Did you sign a retainer letter?Do you have anything in writing where he agreed to do the VAT return?Kind regardsAJ
Customer: replied 4 years ago.

He sent me an invoice which I disputed through an email. Then his solicitor sent me a notice and now the formal claim form.


In terms of the work, I've not got anything from him to date. I had to get my accounts prepared from a different accountant on urgent basis and have submitted to HMRC.


Not sure what a "retainer letter" is. There was nothing in writing from either side. Only thing I ever signed was the form 64-8, authorizing him to prepare my accounts. If I don't have in writing whether he agreed to prepare VAT, he doesn't have anything in writing that he only agreed to the annual accounts either.



Expert:  Alex J. replied 4 years ago.

Thank you.

I can see no reason why you can't defend this claim. You have the following grounds:
1. The accountant has not done any work or provided any proof the work was done;
2. He did not send you a retainer;
3. He unilaterally changed the terms of your agreement.
4. On this basis the contract never came into force;
5. He potentially misrepresented to you the services he can provide.

I do not think at his stage you will have a counter claim. This is because you would have had to have filed your accounts anyway. Your only potential loss is any fines you suffer or the difference in price for instructing a new accountant.

What I suggest you do is as follows :
(A) Make a complain to the institute of chartered accountants for England and Wales;
(B) you must ask a local solicitor to defend this claim. If the accountant has not followed correct Pro tocol there
Customer: replied 4 years ago.

Thanks. I've got a few questions:


1. What is a "retainer"?

2. This accountant is not registered with "the institute of chartered accountants for England and Wales", so where else could I make a complaint?

3. I was expecting help on how to respond to this claim without paying fee to a local solicitor, hence the need of asking question here please.

Expert:  Alex J. replied 4 years ago.

Thank you:

1. The retainer is a letter the accountant should have sent you with their terms and conditions and also details of quote.

2. The alternative would be to complain to Trading Standards at your local council.

3. To respond you will have to file a defence. Can you tell me how much he is claiming?

Kind regards

Customer: replied 4 years ago.

Thanks AJ.


The agreed fee was £1000 and he is claiming for £1195.32 which includes court fee, solicitor's fee and interest.


What should I write in the defense?

Expert:  Alex J. replied 4 years ago.

Thank you.

Your defence is essentially that he has not done the work and misrepresented to you what services he was providing.

If you knew from the outset that he wouldn't do VAT returns would you have used this accountant?

Kind regards

Customer: replied 4 years ago.

No, I won't have used him at all.

Expert:  Alex J. replied 4 years ago.

Thank you.

You need to put in your defence why he is not entitled to claim this money;
1. The service was never provided;
2. You never signed any terms and conditions;
3. He did not provide you with a retainer;
4. You never agreed the scope of the service to be provided.

You need to attach with the defence any emails or correspondence you have that shows what was agreed. If you can also remember what was said a witness statement detailing the conversation will also help.

I look forward to hearing from you.

Kind regards