Last year marked an unusual occurrence for ICAEW, when the Institute went to the High Court to seek an injunction against Crewe-based Alan Brookes and his firm Brookes O’Hara.
Former ICAEW chartered accountant Brookes and his firm had persistently ignored letters from ICAEW’s intellectual property team as well as two sets of solicitors’ letters warning them that in claiming membership of the Institute they were infringing EU trademarks.
So-called passing off cases like these crop up fairly regularly. ICAEW receives around 10 complaints per month about individuals or firms who appear to be promoting themselves as ICAEW chartered accountants when their membership has lapsed or when they have no connection to the Institute, past or present.
What made this instance stand out was the absence of any willingness on the part of Brookes O’Hara to respond or engage, leaving the Institute’s intellectual property team with no choice but to pursue a High Court order.
Intellectual property manager Helen Carter says that ICAEW relies on its members, staff and the public to alert it if they suspect a person or organisation is making wrongful use of the brand. That might include using the Institute’s logo on their website or on promotional materials or using the letters ACA or FCA after their name.
ICAEW has a robust in-house procedure for investigating cases that appear to be individuals, firms or other organisations promoting themselves as ICAEW chartered accountants and so linked to the Institute. “Quite often, these cases come to light when a member of the public has used an accountant, run into difficulties [with their work], argues they are negligent and then finds that they are not in reality members and so not regulated by us,” she says.
In the vast majority of cases firms or individuals, once they are approached by the intellectual property team, sign an undertaking to cease using the logo or claiming membership.
“We then list them on the website for three years,” Carter says. Recent infringers can be found on the “Find a chartered accountant” page on icaew.com, under the heading “Beware of misdescribers”.
In the Brookes O’Hara case, Alan Brookes and his firm didn’t sign any such undertaking. As part of the High Court ruling, the firm was required to display a statement on its website for six months announcing the injunction and making it clear that the firm was being restrained from using ICAEW trademarks. The website has since been taken down.
It is ICAEW policy to publicise these types of orders to show that it takes infringements seriously. Where an individual holds themselves
out to be an ICAEW chartered accountant, by implication they are qualified, registered and regulated.
“But if he is not a member he doesn’t have CPD obligations to fulfill and will not be regulated by us, so it’s a serious misrepresentation on his part,” says Carter.
“By purporting to be an ICAEW chartered accountant, he may be charging more than others.” Infringements aren’t confined to the UK. Carter cites a case in Indonesia where a training organisation incorporated ICAEW’s logo into its brand, using their own name beneath it.
Members of staff are very aware of the need to protect the brand, Carter says, but infringement cases are becoming more frequent and can be complex: “We now have a significant number of ICAEW trademarks protected worldwide, wherever the Institute operates.”
Twenty years ago, passing oneself off as an ICAEW chartered accountant involved replicating the logo on letterheads and business cards. Infringements in the digital age take a different form. Individuals and LinkedIn or Facebook groups can readily appropriate the brand and people can represent themselves as an ACA or FCA on a LinkedIn profile or other online space. “We get support from our social media teams and pursue groups on Facebook or LinkedIn that use the logo when they shouldn’t or represent themselves as members of ICAEW,” says Carter. “The majority of our complaints will be related to online use. We always recommend that people verify [an accountant’s membership] at membersearch.icaew.com, before they get into difficulties, even if they are just not sure. We would rather run a check in advance than leave it too late.”
Many members would agree that active measures to protect the ICAEW brand are valuable and a justifiable expense. Ensors partner Fiona Hotston Moore says she fully supports the measures the Institute took in the Brookes O’Hara situation. “As members we have invested a lot of time in obtaining and retaining ICAEW membership as well as the annual not insignificant membership fees, and I am sure we expect others to either comply with the regulations or to be excluded from membership and action taken on any attempt to pass off,” she says.
It is important for ICAEW to police use of the brand and membership robustly. Membership is a two-way street, providing guarantees to clients, but also to firms as employers.
“Our clients, fellow professionals and prospective clients recognise the importance of the professional qualification and the value and confidence in engaging a member of ICAEW,” says Hotston Moore. “Equally, as an employer, we place reliance on the importance of membership when we recruit employees who are members of the Institute.”
For ICAEW, protecting members of the public and businesses from individuals who have failed to maintain their membership and chosen not to stay current in their qualifications and development is the primary aim behind these kinds of measures. The brand carries intrinsic worth for a wide range of members whose work involves an advisory role to businesses – even if they have moved away from core and heavily-regulated areas such as tax, audit or financial reporting.
Denis Kaye, founder of Firm Ideas, does not use the brand other than as a means of confirming he is a chartered accountant. He works as a business adviser and mentor in Yorkshire. There are, he says, any number of people who are prepared to claim to be ICAEW chartered accountants. He thinks the Institute could be more active when it comes to positive promotion.
For some members, the issue of brand protection can be more personal. Mark Lee, a speaker and member, left mid-tier firm BDO to go it alone 15 years ago and left active practice 10 years ago. He maintains his membership, and not just because accountants are now his clients. “I’ve retained my membership because I am so proud of getting the qualification. It means a lot to me because it is a key part of who I am, even though I’m not in practice any more,” he says. “And because I work with accountants, I think it’s right to continue my membership,” he says.
For a sole practitioner or small firm, for instance, the brand may represent an important distinguishing mark, he points out, depending on your location. “If no one else has the badge in your town, then the badge is enough to get you noticed,” he says. “My big thing is helping accountants to stand out in a positive way and that may mean referencing your membership and how that benefits clients.”
All the way to jail
High Court injunctions include a committal order, so where there is evidence that an individual has failed to comply with the terms of an injunction, they might find themselves on the wrong end of an application to be sent to jail.
In 2007, the last occasion ICAEW went to court in a passing off case, former ICAEW chartered accountant Mark Horgan of Southampton was found to have ignored the terms of an injunction the Institute secured against him two years earlier by continuing to represent himself as an ICAEW chartered accountant in job applications.
The court issued a warrant for his committal to prison for 16 weeks and ordered him to pay costs of over £10,000.
A custodial sentence in cases such as these is rare, says ICAEW’s Helen Carter, however: “We would pursue the committal option if we had evidence that the infringement was continuing.”