Run a small construction co. - client won't pay final invoice. - help RE: Small claims please ***Resolved***

[BankFodder]

It would probably be helpful if you gave us more information such as the value of the claim, and outline of the work which is carried out and an outline of the arguments on each side .

Also a timeline of events

 

[BankFodder]

Bringing a small claim in the County Court is pretty straightforward. We have lots of guides here if you follow the various links although some of the steps might be a bit out of date because things have changed and we don't have the resources to keep up all the time.

 

However we can take you through it all.

 

There is no point in bringing a claim if you're not going to win and that means that although the steps are straightforward, preparation is very important. Also, once you have judgement in your favour, there is a further step which is enforcing the judgement.

 

Many people think that you get a judgement in your favour and you walk out of the court with a cheque in your hands.

 

I understand from you that you have been working on this project for three months. You have been putting in a weekly invoice which has been paid promptly without any problems at all.

For some reason or other these people prefer not to engage with you directly but prefer that everything is conducted by email even when you are both on the property.

 

On one hand it seems to be very strange behaviour. On the other hand, maybe they were anxious to have a paper trail in case anything went wrong.

You make a very reasonable point that maybe the lack of face-to-face engagement has resulted in some distance and lack of trust between you. If that is what has happened then of course it's a shame.

On the other hand, the fact that there is now a trail of written exchanges should be very helpful to you.

 

You say that everything went well until the final week when you put in your bill for £3000. Surely there has been some kind of exchange in relation to this.

You have put in the bill, they have made some comments in response – no?

Did you simply put in the bill and they haven't responded and haven't paid and aren't replying to your messages?

 

I think it's very important to understand precisely why they don't want to pay you any more.

 

Had you given them some ballpark figure at the outset of the project which has now been exceeded?

 

Was the weekly bill always £3000 – Or has it varied?

[BankFodder]

What is the total value of the job including the £3000?
What was the original quote – which I understand was abandoned with the agreement of both of you?

Have they made any comments as to the quality of the job – in particular the last phase.

What's the arrangement in terms of materials? Were you to buy the materials or were they to be the purchasers and they would be billed separately?

 

Also I don't think you have told us how long it has been since you finish the job and submitted your final invoice – and so how long the payment has been outstanding.

[BankFodder]

I don't understand this

 

18 minutes ago, Kwabena said:

The original quote was around £80,000 plus vat,  I have no idea what the current total is.  They have been invoiced for approx £35,000 by me including labour, materials I have supplied and hire equipment that went through my account

 

I don't understand the discrepancy between a provisional accreditation of £80,000 and the fact that you have only invoice for £35,000 which presumably includes the unpaid figure.

 

I also don't understand this

20 minutes ago, Kwabena said:

  Any materials that wen't through my account would have 10% added to tehm but I would give them every opportunity to pay direct and avoid this.  Materials that went through my account added up to about £3,500 but I'm only adding 10% to about £1,600 worth

 

 

Yes it is important that the job isn't finished. It may not be a breach on your part – but it is certainly significant and it may give them a basis for complaint.

Why isn't the job finished? Is this because of the position that you are taking because you haven't been paid against your last invoice?

 

What is your guess as to the value of the outstanding work?

In terms of the materials, they appear to be objecting to you marking up by 10%. I'm trying to understand whether the deal was that they would effectively be the purchasers of the materials – in which case they would reasonably expect to get them at cost (10% to cover your own expenses is fine) – or whether you with the purchaser of the materials and supplied them to your customers in which case I don't see any problem in adding quite a large markup.

 

We need to get a clear picture here before you start launching into action. I'm worried by your statement that you have no idea of the current total. You need to be completely in control of your own figures – especially if you are moving into formal conflict on this

 

[BankFodder]

So in fact the job is complete. You have completed everything that was envisaged by your contract.

Also from what you say, it seems to me that you were the supplier of the materials needed because they were purchased by using your trade accounts and you then went on to supply them to your customer.

On that basis I can't see any problem with adding a markup and it seems to me that you have simply added 10% to represent some actual costs to yourself that you haven't sought to make any profit from the materials by reselling them to your customer.
The 10% mark up to represent your accounting costs was apparently documented in your exchange of emails and either agreed to specifically or at least not objected to. Is this correct?

 

 

 

I'm afraid that you are complicating things by adjusting what you say all the time.

I now understand that they have paid you £35,000 and that there is £3000 outstanding – is this correct?

[BankFodder]

Okay, final questions before we decide on a plan, have you had any exchanges about this last payment – and if so could you reproduce them here please?

[BankFodder]

There is nothing wrong with putting it up on a public forum. As long as you are honest and straight dealing – what do you have to hide?

If you want help then you will have to give us the information we need

[BankFodder]

Thank you. So there are some disputes as to the quality of the work.

I notice that they talk about withholding money until a few issues have been sorted out et cetera.
In other words they aren't proposing to withhold the money permanently.

Of course they aren't being very helpful in not responding to your most recent email.

I don't fully understand what is being disputed here.

If all of the points that they are disputing were upheld, how much do you think that might be worth?

In other words, they are withholding £3000 but presumably the things they are complaining about would be a lot cheaper to fix.

I'm trying to find out how much is actually in dispute here

[BankFodder]

????

[BankFodder]

No they won't be allowed to hold money back based on random reasons which is why I have asked you to tell us about the value of the work which they are apparently disputing.

Please will you try and address the questions.

We are trying to give you the best advice possible but we need information. We are trying to protect your interests that if you don't help us then we can't help you

[BankFodder]

4 hours ago, BankFodder said:

If all of the points that they are disputing were upheld, how much do you think that might be worth?

In other words, they are withholding £3000 but presumably the things they are complaining about would be a lot cheaper to fix.

I'm trying to find out how much is actually in dispute here

 

[BankFodder]

So you are saying that it is possible to identify the defects or the shortcomings that they are referring to and to put a value of £1,000 as being the cost of addressing them. Is this correct ?

 

 

And in that case it would be reasonably safe to say that £2,000 worth of the work is undisputed

 

[BankFodder]

I suppose that you will eventually have to bring a court claim against these people but before you do that I think it would be a good idea understand the value of the various concerns that they have, to make a further effort to work with your customer either to resolve those issues or to reduce them – and if possible, even secure a part payment so that the value of your eventual claim will be reduced.

They seem to be concerned about the 10% that you have added to the materials.
Can you give us a total for that please.


They also seem to be concerned about the fact that you have spent some mornings doing school runs – but you say that you made up for that by working later and that in any event you had alerted them to this and they agreed.
In that case there seems to be nothing that can be said about that and on the face of it they are wrong to challenge you.

They seem to be concerned about some aspects of the workmanship – and in respect of this, I think we need to get a more detailed list – a snagging list – and at the very least make proposals about inspecting their concerns and then proposals to address them.

Part of this approach is based on reducing the problem as much as possible. But a more important part of this approach is about gaining the moral high ground and showing that you have bent over backwards to deal with your customers and that they have simply been stubborn and uncooperative and have forced you to litigation.

I understand from your earlier post that there are issues with drainage, kitchen lights, and some material left on site.

It would be helpful if you would list out in a bit more detail what is being complained about.
However, we don't need a load of narrative. We need something a bit more detailed as if you are carrying out your own inspection and preparing to quote for the job. This means that you identify precisely the problem and the proposed remedy.

[BankFodder]

I wouldn't start offering money at this stage.
I think I would want more specific information as to their concerns.

 

Quote

Dear XXX

I'm sorry you haven't responded to my letter of XXX date which I have attempted to address your concerns.

I still think the best thing to do is to have a dialogue in order to understand the issues and hopefully to agree a solution.

In terms of the workmanship I understand that you have an issue with the drains. However, you haven't identified in detail what the problem seems to be. If you be kind enough to do that then I'll get back to you immediately with my comments.
The best approach might be for me to meet you at the property by appointment and you can show me the problems that are worrying you.

I understand that you feel that there is a need to hire some more equipment – I am assuming that this is a digger. Once again, if we can meet on site then we can discuss this and I would suggest that if it is necessary to hire equipment that I am best place to do it because I will obtain a much better price through my trade account.

I understand also there is the problem of missing kitchen lights. These were removed but I agree that you asked me to retain them and unfortunately it seems that they have probably been disposed of when we were carted away rubble et cetera.
As you know, I already reduced my original invoice by £160 (the bookkeeping fee) to reflect the disappearance of the lights. If you think that this is not an adequate sum then please let me know what you have in mind.

You have also referred to the problem of certain material having been left on your site. You have asked that this material be returned to the supplier and that I would then receive a credit to my trade account.
I think I have already pointed out that I'm happy to return the material but any credit will be paid directly into your own account because these materials were paid for by you in the first place.

You have also referred to "unopened materials" which have been left on site. I'm afraid I'm not able to recall what they might be. Once again, I think a site visit would give us an opportunity to understand exactly what issues we are talking about and to make suitable arrangements.

I look forward to hearing from you

Yours sincerely

 

Please have a look at the above draft. Make any additions, subtractions or modifications and then post the result up here for us to see.

The idea of this letter is not to talk about money but simply to show goodwill and to avoid contention.

Hopefully shows an openness and a willingness to resolve the situation and whether or not the letter has its effect, it will count you in good stead if you have to go into procedure

[BankFodder]

We would like to see the completed draft first please

[BankFodder]

Don't take too long.

It's very important to be highly reactive and keep the other side on the back foot.

To take control, you need to dictate the pace – and it has to be fast

[BankFodder]

I've edited the draft in red to reflect your concerns which I think are entirely reasonable.

 

If you're happy then get this message to them tomorrow. Update as if you get any responses but if you don't hear anything by next weekend then let us know because I think it will be time to send a letter of claim.

A letter of claim means that you are giving them 14 day deadline or else you will sue them. This is not a bluff and if you set down this timescale then you must stick by it

[BankFodder]

Could you please explain a few simple words what the issue is about the drains

 

Also, whose idea was it to structure the contract on the basis of the amount of work carried out each week rather than a single price for the whole job? And could you just give us a bit more detail about why it was designed that way

[BankFodder]

????

[BankFodder]

Thank you. So you have in writing that there was a choice and that they chose the weekly work option?

You haven't addressed the question about the drains.

It will be helpful if you would attend to all the questions and also maybe engage with the thread a little bit more quickly.

[BankFodder]

I should point out that the volunteers on this forum also have work and parenting commitments.

Does your explanation relating to the drain mean that they weren't expecting the work to be completed during that week?
As you were effectively charging them on a daily basis, I gather that nobody could say that this is a job that you have been trying to charge for but which wasn't carried out – correct?

If that is the case then why would they say that the drains have to be connected first before they are prepared to respond to you?

[BankFodder]

But if they tested them and found that there was some problem, in what way might that have been caused by you – something you did or something that you shouldn't have done but which you did?

[BankFodder]

If there was any issue with the train for which you would be responsible, what would be the likely cost ?

 

 

Is your friend continuing to work there and will that person be able to continue feeding you information?

Also, maybe some useful photographs?

 

 

[BankFodder]

Yes I think there is entirely reasonable that they bring defects to your notice – especially if they think that you should be responsible for them and give you an opportunity to comment.
If they are getting an independent inspection and quotation then I think it's reasonable that you are given an opportunity to comment on the quotation before they put any work in hand.
I was going to propose that you send a letter of claim – but in view of the fact that the drain work is likely to be completed very soon, then maybe it's better to send another enquiry.

 

Quote

Dear XXX

Thank you for your note saying that you will respond once the drain is connected.

I think is reasonable to let me know if there is some problem with the drain and for which you think I might be responsible.
If this happens to be the case then please will you let me know how you are proposing to deal with it. Whether you have had any independent assessment of any problems and whether you have had any independent quotations for remedial work.

I gather from your message that the drain is your only area of concern and that you have no issues with any of the other work which was carried out for you.

If this is not correct then please will you let me know.

Yours sincerely

 

I think it's important that you can show a paper trail and that you have tried to reach out and to engage at every turn.
 

[BankFodder]

That's fine. It means that you are applying pressure and they can feel it .

It means that you are occupying the moral high ground .

 

If you don't hear anything by the weekend, then I suggest that we will send them a letter of claim giving them 14 days .

Make sure that you are happy about this because once you send the letter then you have to stick to your timescales. It's not a bluff