Claim against client that country hops

[Desperate Daniella]

Hi all,

 

I am owed money by a client and she is "declining" to pay. The payment was due three months ago and although there is a signed contract they are refusing to pay up. I want to take them to Court, but they are playing silly buggers and as they go in and out of the country I am concerned that they will get any judgment against them set aside on the basis that they were not here to defend it. (I know I can fight the set aside, but this is dragging on forever. )

 

So far she has had the Letter Before Claim, which she replied to by email on the last day specified in my letter and was arguing again that she didn't want to pay. I therefore replied by email immediately that we would leave it to a judge to decide and I specifically asked her if she was going to be in the country for the next 21 days, because I know she often takes trips at this time of year. I asked if the Claim could be sent to her lawyer if she was going to be away. I received no reply.

 

One week later I emailed her lawyer who responded a few days after that to say that the client was out of the country until at least the middle of October. Of course I have no means of knowing when she actually left the country because I wasn't told she had gone until almost two weeks' after I had asked that question. The lawyer said that the client wanted the claim to be sent to her personally, rather than to the lawyer, and this of course delayed things further.

 

Last week I emailed the client again who responded yesterday to say she had been out of the country with no email access (which I don't believe). I emailed back immediately and asked if she was planning any further trips and of course there has been no reply.

 

It's a simple enough question but again she's ignoring it. Obviously if I don't hear by the end of the week I'll email the lawyer again and if she's on yet another trip with an open-ended return ticket everything will be delayed yet again.

 

I would like your opinion. I think it is blatantly obvious that these are all delaying tactics. Do you think a judge would agree? Wouldn't anyone who thought their Defence was good want to get on with it? I would.

 

Also, can I make any statement in the original claim about the delaying tactics?

 

Her reason for not paying, by the way, is because there are certain terms in the contract which state that I will, on the client's instructions, undertake various services. It's quite clear that a client may or may not wish me to provide these services. She did not want me to undertake the services, which I was willing and able to do, saying she was happy to handle these matters on her own. Now she says because of this she does not have to pay me.

 

CPR 3.9 states that an application for relief must be supported by evidence. If I issue a claim and she argues that she was out of the country and could not defend, can I persuade the judge that she must produce her passport.

 

Also, can the email correspondence about her travels be used as evidence to show that she was aware of a pending claim, and could have instructed her lawyers, but chose not to, and completely ignores direct questions about when she will be around.

 

Any thoughts would be very gratefully received. I am absolutely sick of this.

 

DD

[steampowered]

Please refer to CPR 6.9 (http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part06#6.5). If the Defendant is an individual, service on the usual or last known residence is good service.

 

Assuming you have already sent her a formal LBA, I suggest going ahead and serving the claim on her UK address. You can also send a scanned copy of the claim to her lawyer and to her email address, which will make it very difficult for her to claim that she didn't know about the claim.

 

I don't think you will achieve anything by asking about her travel plans or getting into email tennis with her or her lawyers. Until a claim has been issued she has no incentive to properly engage with you. The CPR allows Defendants to request additional time for filing their Defence, if she needs this due to her travel plans then she can ask for that after the claim has been issued.

[SuperVillain]

I'm inclined to agree with the above post. Serve at the address to which you sent the LBA - she did respond to this letter so you knew she got it. And I think if it did come to an application to set aside you have made all reasonable enquiries i.e. speaking with her solicitor who confirmed service needs to be on her.

 

Regarding your question - "Also, can I make any statement in the original claim about the delaying tactics?" - I wouldn't suggest you put this in your particulars as the delay is only as much as you make of it. You sent an LBA she indicated within the time you specified in the letter, that she wasn't going to pay, so proceedings could have been issued then.

 

Are you confident of your Claim against her? What sort of Defence might she put forward? From what you described I guess her Defence would be that she instructed you to carry out these "various services" and you didn't. So do you have anything in writing confirming she didn't want these services?

 

If you're confident, I wouldn't waste time as she's made clear her intention not to pay - just issue. Once proceedings are deemed served (you'll receive a Notice of Issue from the Court confirming date of service) she has 14 days to acknowledge the claim. If she doesn't respond just apply for Default Judgment against her.

 

In all likelihood she'll probably pull her head out of the sand when you try and enforce the Judgment. This could be met with an application to set aside, for which she will need to convince a judge that she had a reasonable prospect of defending the claim.

[Desperate Daniella]

Hi steampowered and SuperVillain,

 

Thank you for your replies.

 

I hadn't thought about scanning the claim form and emailing it. That's a very good idea.

 

The reason I have been more than patient with her is because she is a client of a lawyer who has previously referred other clients to me, although not this one who came through another source. I always had doubts about her - gut feeling? - but was assured by the person that recommended her that she was honest and would pay her bill. Also of course there was the connection with the lawyer with whom I have always had a good relationship in the past.

 

The agreement she signed is exactly the same one as I have used for the other clients of this lawyer and I have never had any problems but of course this particular client is bad-mouthing me so may in fact lose me future business.

 

It's made clear that the client has a choice of whether or not to use my further services once the main part of the agreement has been achieved. It is for this part that the fees are due, not the additional services which clients may or not choose to use. She didn't require them because she said she would handle them herself. She's now gone through the agreement saying because I didn't do them she doesn't have to pay me.

 

She's written various moaning letters in which she completely contradicts herself, which is good if it comes to trial, and she also sent an email when she signed the agreement saying how much she really resented having to use my services. Now she says I didn't do anything she couldn't have done for herself. But she didn't do it for herself; I did. Actually she even said she resented having to pay the lawyer and how useless she was, but she needs the lawyer so pays her. She no longer needs anything more from me so thinks she won't pay.

 

I'm surprised that she thinks her case is so good that she is not getting the lawyer to act for her. I'm finding it difficult to believe the lawyer would tell her she has a case, but maybe she hasn't told her that at all. Maybe this woman is just being pig-headed. Her reasons for not paying carry no legal weight at all. She just doesn't want to pay her bill.

 

I had hoped not to take her to court because I don't particularly want to do that to a client of a lawyer who has sent me business, but I think you are right and I will have to issue.

 

I imagine she's probably thinking that I won't do anything until she replies to my email asking about her travel plans, so I will email today saying that as I haven't heard from her I will issue proceedings on Monday. I won't have time to get to the Court before then, and it gives her the weekend to reconsider.

 

If it wasn't for the situation with the lawyer I really wouldn't have let this drag on so long as I'm sure you will understand.

 

Thank you.

 

DD

[steampowered]

You can issue online at https://www.moneyclaim.gov.uk DD no need to actually go down to the court at this stage.

[Desperate Daniella]

Thank you. I've heard of this but never used it.

 

Do you have the same amount of control as you do by using your local court? Can you ring up and actually speak to someone if you need to?

[steampowered]

Yes, you can speak to someone as they have a helpdesk. Please refer to http://www.justice.gov.uk/courts/northampton-bulk-centre/money-claim-online/frequently-asked-questions. When the case is issued it goes through the bulk issuing centre in Northampton. If the Defendant enters a Defence the case would then get allocated to the Defendant's local court.

 

Even if you issue through your local court, the case will still get allocated to the Defendant's local court.

[Desperate Daniella]

Thank you. I'll have a look at the form later today.

[The Mould]

What about a statutory demand served at her last known address?

 

This may or may not be the route to take. In my opinion, it is. Statutory Demand for amount owed (she cannot defend this based upon your material posted here), then, if no resolve on the SD, commence/continue with bankruptcy petition against her.

 

The above should achieve the response/resolution that you seek for closure on this matter.

 

Kind regards

 

The Mould

[Desperate Daniella]

Hi The Mould, and thank you for looking at my thread.

 

I was tempted to ask you but I know how much you are doing for wendyboats at the moment, and there is your own situation too, so I didn't want to over-burden you.

 

I didn't know I could issue a Statutory Demand. That's an idea worth thinking about and I don't think she would be expecting that at all.

 

I will be away from tomorrow, at my mother's which is miles away from anywhere with no internet access. Please may I come back to you for advice on wording that when I return in the middle of next week? If you aren't around when I post and I don't get an instant response I promise I'll be very patient.

 

Thank you.

 

DDx

[steampowered]

You can use SD only if the amount is above 750.

 

If you wanted to actually enforce the SD you would need to apply for bankruptcy proceedings, which would require you to pay a deposit to the Official Receiver which will be substantially more than the fees you would otherwise pay to the county court (I believe the deposit is currently about 700). There is no guarantee you'd get the 700 back especially if this person has other creditors.

[Desperate Daniella]

It's just under £2,000.

 

I know I'd have to pay the £700 which I couldn't afford to do, so I'm still considering whether I can do this.

 

I don't know enough about it. If the SD is granted, regardless of whether she defends or not, it's a question of whether she would risk my starting the bankruptcy proceedings or pay up. I can't see that she would as she definitely has money to pay me. She just doesn't want to pay me.

 

She didn't want to use the service I provide in the first place and she made it clear she thinks it's easy money - which it isn't. I worked extremely hard for her, and fulfilled the contract within five weeks. She needed my service and was pointed in my direction. I solved her problem, and I also helped her with a number of other things, which were not in my contract but I was happy to help her, and of course I thought she would pay her fees on the due date.

 

Then there were all sorts of excuses why she couldn't pay. She'd lost the invoice. She'd lost her cheque book, and so on.

 

While she was avoiding payment there was one other thing I had said I would arrange for her involving instructing a workman to do some work for her. This was not part of my contract at all. I was just trying to help her as I know a very reputable tradesman. I explained that I needed money to pay this man up front for materials, and I wasn't willing to do this while she still owed me my own £2,000 fees. She actually expected me to shell out £150 on her behalf and I refused to do this. Would anyone? And that's when she started to say she didn't need to pay me, saying I hadn't fulfilled the terms of the contract because I hadn't provided the additional, essentially free, services which she told me she didn't want anyway, and I can prove that. Then she started bad-mouthing me to her lawyer and the person who had recommended her.

 

All the time she was not paying me she was splashing money around like water. She could pay me. She doesn't want to.

[steampowered]

Some people are incredibly selfish/unreasonable and seem to get outraged when they are challenged. Its up to you how you want to proceed from here. If it was me I would go ahead and issue small claims proceedings immediately. You need to give 14 days warning but it sounds like you've given more than this already. Make sure you claim interest and court costs (MCOL should assist with this).

 

Serving an SD may encourage her to pay and it is free. The problem is that it takes time. If she paid you that's great. If not you'd have to wait 28 days before applying for bankruptcy, and if you have decided against paying the deposit then you'd just be back at square one.

 

Did she use your services in order to run a business? If so, you can claim additional compensation of 70 for the late payment (see https://www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs).

[Desperate Daniella]

No, she's not running a business. I'm certainly changing the T&Cs of my agreement for future clients to say that interest will be payable on late payments.

 

She's had her 14 days warning and since then she's been playing silly buggers - not answering emails and then her lawyer lets me know she's out of the country. She travels a lot. Nice if you can afford it!

 

I can't do anything until next week as I'll be in the country with no internet access, but I am going to send her one final email today saying that it's been dragging on too long, etc., and I'll be issuing proceedings on Monday. She keeps sending letters, very repetitive ones, and actually she's dropped herself right in it by trying to be too clever. I think she reckons as long as there is correspondence going on I won't do anything.

 

I don't think she really wants to go to court. Otherwise she could have instructed the lawyer to accept the claim while she was away. That's what I would do if I felt I had a great defence because I'd want to get it over with.

[SuperVillain]

" I think she reckons as long as there is correspondence going on I won't do anything. "

 

I find this with a lot of people who don't have genuine disputes.

 

I'm dealing with one debtor who rings up and promises payment (which never arrives) - every time they ring they ask if I've sent anymore LBAs. As if that's going to stop proceedings being issued.

 

The reason I'd go with the proceedings and not the Stat Demand is purely because if you don't intend to go down the route of petitioning for Bankruptcy what you're essentially sending is a 28 day Letter Before Action with no action to follow...

 

The risk of proceedings is that even if she doesn't defend there's no guarantee she will pay, even with a Judgment against her. You may end up going to the extent of instructing the HCEO. But obviously that's all speculation, she might pay after receiving proceedings. Its a risk/reward calculation you just have to make.

[Desperate Daniella]

Thank you.

 

I'll weigh it up while I am away, but I'm definitely sending an email telling her I am issuing proceedings on Monday.

 

She has no real defence so I don't see why she wants to add court costs and interest to her bill.

 

I'm hoping the lawyer will actually have told her she has no defence, despite what she says, and if she thinks I'm actually starting that might concentrate her mind.

[The Mould]

he statutory demand does costs, I agree, however, I would borrow all and any monies from family (trusted friends) to serve this statutory demand and follow through with petition for bankruptcy against her.

 

Desperate Daniella, this is purely my opinion based upon your postings here, I would go all out war on her with the statutory demand process, because this process usually provides the required result.

 

Issuing a claim in this matter, whilst may be the cheaper option, but this will drag the matter on and on; she defends, then AQ stage, then disclosure state, then exchange of witness statement stage, then full trial and all of the foregoing does not take into any applications that you may wish to make as a necessity in the light of her response to this matter.

 

SD, in my opinion is the route you ought to take on this matter. Further, as regards the £150 element that she relies upon, such agreement is in addition to original contract, therefore, you have fulfilled your obligations thereunder and she is in fundamental breach of the same and this additional £150 agreement, she is, therefore, the contract breaker.

 

 

The above is my opinion based upon the material posted here by you, please do not feel obligated to follow my advice/help/opinion on this matter. Having said that, follow my advice and put the fear of God into her, give her 14 days to resolve this matter to your satisfaction, failing which, you will indeed commence with bankruptcy proceedings against her pursuant to the provisions of the Insolvency Act 1986.

 

You advise her to seek proper independent advice as to her position in this matter with a view to resolve the same and thereby cause the above-stated legal action to be unnecessary.

 

You look forward to her swift and satisfactory response hereto within the stated time-scale, failing which, you regret that legal action will commence against her and she will receive no further reference nor notice on the same from you.

 

Your sincerely hope that the above legal action will not become necessary and look forward to her proposals to settle this matter with you without the need for said legal action to recover the sum due and owed by her.

 

Yours faithfully (sincerely if you know her name)

 

Desperarte Daniella

 

Kind regards

 

The Mould

[SuperVillain]

I suppose I leant towards proceedings because you couldn't afford the initial costs of the bankruptcy petition, however I would absolutely agree with The Mould in that if you can get the money together for a bankruptcy petition then it is a much greater threat than proceedings.

[Desperate Daniella]

Hi guys,

 

I've just got home from the back of beyond two days later than planned.

 

Thank you for your thoughts.

 

I had a concern about the Statutory Demand. I am wondering if this would work bearing in mind she doesn't own her home, or have a car.

 

I can prove she pays £3,000 a month rent for the flat she's living in, and spends a lot of cash - you should see the Champagne and Designer Vodkas - but I'm worried she can hide this - get the rent paid by someone else, for example.

 

I sent her an email saying that as I hadn't heard from her I would issue proceedings immediately (even though I couldn't as I was away) and I got the most bizarre reply.

 

She said she had been "advised to tell me [she] couldn't attend anything due to other commitments" and then listed some days in the next six weeks when she won't be available. That makes no sense whatsoever. If she had spoken to her solicitor I can't see why she would get that advice. Any solicitor knows and would have advised her that it is the Court who gives the dates and in any case she wouldn't have to put in her Defence for 28 days.

 

The letter was weird anyway. It starts, "Good evening Desperate Daniella," and finishes by saying that she may have to change other dates IF I wish to proceed.

 

Anyway, I'll do something on Monday, but would appreciate your thoughts on a Statutory Demand if she has no tangible assets.

 

DD

[SuperVillain]

Very odd...

 

If you serve a stat demand it doesn't necessarily mean you have to press on with the bankruptcy. The mere threat of bankruptcy may be enough to push her into paying.

 

If it gets to the point where she is made bankrupt it's really up to the trustee in bankruptcy (most likely to be the official receiver) to recover and re-distribute her assets. You can provide them with your information and it will be for them to investigate.

 

Remember to serve the stat demand correctly so that she can't argue this point in court at a later date.

 

Another tactic I've used to provoke payments is to send unsealed court forms to debtors telling them they will be forwarded to court if payment isn't received in 7 or 3 days etc. Gives them a last chance to pay before you hit the big red button... In your case I believe it would be insolvency form 6.7 which may do the trick if she doesn't respond to a correctly served stat demand.

[SuperVillain]

Also another question - I presume you were acting in the course of your business when she procured your services - was she also acting in the course of a business or was she procuring your services as an individual?

[The Mould]

If you can prove that she has funds to pay amount owed toyou, then statutory demand is the route.

If she is not available to attend any Court hearings inrespect of your statutory demand, thenthat is her problem and your advantage.

Go for it DD, youhave nothing to lose.

Kind regards

The Mould

[SuperVillain]

Agreed

[steampowered]

DD, a few thoughts:

 

1) Obviously there is no 100% guarantee you'll get paid. If she doesn't have fixed assets that makes things more difficult. But if she is living the lifestyle and has cash to burn then I would think that bailiffs or a third party debt order (if you can identify her bank account) would be effective, as would the fact that her credit record would be ruined for six years if a CCJ is not paid within 28 days.

 

2) With the greatest respect to other contributors who feel differently, my personal opinion is that you should go ahead with small claims and not bother with a statutory demand. Small claims is much, much cheaper than filing a bankruptcy petition. Furthermore, my experience is that with small claims track there is usually just one hearing which decides everything whereas with bankruptcy you can find yourself in court over and over again - it is common for the court to award multiple adjournments of bankruptcy petitions. The other reason is that a SD is not guaranteed to work as she is disputing the debt (even though the grounds for dispute seem spurious).

 

Obviously there are pros/cons either way - a SD is free and might be the easiest way to get you the result you are looking for if she doesn't ignore it - but I still side with small claims.

 

3) Supervillain makes a great point. I was originally going to say I don't know what you are waiting for, go ahead and issue proceedings right now But sending her a draft completed claim form stating that this will be issued if she does not confirm payment in 5 days as a very last chance is a good idea.

 

4) Don't hold your breath about her getting advice from the lawyer. She is unlikely to want to pay £200 an hour in lawyer's fees until you actually go ahead and issue proceedings.

[Desperate Daniella]

Hi everyone and thank you for your thoughts.

 

Half-term is finally over so I can get on with this.

 

The problem with the SD I is that I think her rent is paid through a trust and I think it's going to be impossible to prove that she has actual assets to be seized.

 

If I issued the SD and she doesn't comply I don't think I can raise the £750 to push for bankruptcy.

 

I really don't know enough about how it can work so would be grateful for your help.

 

If I issue a Statutory Demand and she ignores it, can I then issue Small Claims proceedings? Or is there anything that prevents me from doing that?

 

Thank you.

 

DD