All of the Recognised Professional Bodies have rules relating to Continuity of Practice, ie they require an IP to have arrangements in place with another IP for them to take over responsibility for cases on the IP’s death or incapacity. Compliance with this rule is a requirement for all appointment-taker IPs, and for those in partnership it is usually covered in the partnership agreement, while for those in limited companies it is usually covered in their contract of service. For sole practitioner IPs, and partners/director/employees where it is not covered as above, it has historically merely been a matter of having a brief letter from the nominated person confirming that they will take on responsibility for cases. However, it now appears that ACCA are looking for their IPs to have a more formal agreement in place with their continuity provider. We are not sure what they require the agreement to cover, and are not aware that they have issued any guidance that is specific to insolvency appointments, although they do have some advice that might be of general assistance in their ‘In Practice’ publications. We think that it would be sensible to cover such matters as: defining circumstances in which the successor should become involved (death or incapacity in general terms); financial arrangements in such circumstances (how they will be paid and on what basis); triggers for the formal transfer of cases to the successor (including responsibility for the legal costs of any court applications); ownership of the work in progress on cases and arrangements for the realisation of this; ownership of papers; access to the trading premises and case papers; the position of employees; and the position and status of executors and beneficiaries (ie can they give instructions to the successor IP). We assume that ACCA want the agreement to be signed by both the IP and the successor. We are not sure if ACCA also expect partnership agreements and contracts of service to cover similar areas, but consider that it would be appropriate if they did.
While we are only presently aware of ACCA taking increased interest in the content of such agreements, having a suitable continuity of practice agreement is in fact a key part of succession planning for IPs in order that they can protect the value of their practice and the work in progress in their cases for their beneficiaries in the event of death or incapacity, whether they are sole practitioners, in a partnership or directors/employees of a limited company/LLP. This is a complex area with different requirements depending upon your status and personal circumstances, and we would encourage you to consult a solicitor for them to prepare a suitable agreement.
