Thursday, 16 October 2014

Fair weather friends

As I left court last Thursday afternoon, I was feeling genuinely sorry for my unrepresented opponent. We both were. Well, in his case it was more angry than sorry.

He should never have been there, let alone on his own, if he had anything approaching competent advice from the “business finance consultants” who decided to have a play with some statutory demands.

Now, as most commercial litigation lawyers will know, statutory demands are tricky beasts.  In the right hands they can get the job of recovering money done very quickly and effectively. In the wrong hands, they can blow up in your face, figuratively speaking.

The mature and personable tradesman who turned up as respondent to my applications to set aside two statutory demands saw it all as very straightforward.  He had done a job of work, charged what he thought was a reasonable price and had not been paid.  It was not a problem he had ever encountered before, he said.

That was too simplistic a view on any analysis where there was an argument about the price of the work done which was not agreed before the work started and was more than anybody expected because of unforeseen complications in the job.

Worse than that, because those who were not at my opponent’s side in court have so inflamed the situation, the customers had chosen to follow my advice that the contract is probably unenforceable because of non-compliance with the Consumer Contracts Regulations 2013.

The fact is, though, that in another scenario the tradesman could have had his day in front of a judge keen to listen to all that he had to say and look at all the papers and photographs he had to show, none of which either the court or I had seen at any earlier stage (despite requests).

In fact, the judge was very patient - and entirely with my blessing.  Whilst he explained at least three times the difference between the insolvency proceedings and “the normal route in the county court” these things simply do not resonate with many non-lawyers.

It certainly did not strike a chord with the respondent when the judge concluded that “this case should never have proceeded by statutory demand” and added comment about “high risk strategy”.

The real villains of the piece were absent - the professed recovery specialists who lit this particular firework. You could not make it up…

It is as clear as day from the unusually detailed and rambling narrative on the statutory demands that they were aware of the full facts of the case including, seminally, the dispute over the price.  At the heart of it all there was even an issue as to whether an invoice had ever been delivered. 

It was telling in that respect that no copy invoice was attached to the statutory demands –not the original, nor the alleged replacement said to have been produced after attempts to negotiate the price.

Well that would be enough, but why skimp on the job?  The moldy icing on this very stale cake was as follows….

First, both demands were unsigned – it is a mandatory requirement that they should be “authenticated” under the Insolvency Rules 1986 as amended in 2000.

Secondly, approximately a quarter of the sum demanded comprised interest, penalties and costs under the Late Payment of Commercial Debts (Interest) Act 1998 (“the 1998 Act”).

For anyone who is not familiar with those useful regulations, they are as the name implies relevant only to commercial debts i.e. business to business.  They have no place in a consumer contract for work done at the customer’s home.

As a matter of interest, the debt collection experts thought it warranted £350 plus VAT per demand to produce these unsigned documents and then put them in the post – not even bothering with the usual niceties of personal service.

And that’s not all.  On top of that meaty figure, there was a claim in each demand for almost as much again in “commission”.

Then we have the statutory penalties (not an alternative to recoverable costs under the 2013 Late Payment Regulations) and interest under the 1998 Act.  None of it had any place in this arena.

A month before the hearing, we wrote to these jokers and in the course of two pages we set out all the objections to their inept offerings.  We respectfully suggested that they abandon the demands and agree to pay our clients’ costs which at that point were a modest £300 plus VAT.

Their response was to acknowledge the point about the 1998 Act and say that they would abandon the claim for a few pounds of interest, but not the costs (no I don’t understand either) but otherwise insist on payment in full of the original disputed price and all of their costs.

Last week their unfortunate ‘client’ left court no nearer - in fact further away from – recovery of his unpaid bill of over £2000 and a court order to pay almost as much again for the costs of our applications, within 14 days.

He could not begin to understand how he was in that position.  These people had been recommended to him by a friend.  He pays them £30 per month retainer and when this problem arose he handed it to them – the professed “experts” – to deal with.  When it started raining, they cleared off and took the umbrella.

Today I see an article in the Solicitors Journal  reporting that courts are ‘rapidly becoming lawyer-free zones’ and (rightly) lamenting the situation. Some litigants are turning their backs, others chancing their arm and people like this poor guy turning to (seemingly) cheap muscle-heads who really don’t have a clue about the law.

It’s not just a case of another litigant in person doing his sincere best but ultimately wasting everybody’s time and his own money.  What’s really disturbing is that this man was led to that position and left there alone by the vultures who saw only an opportunity to demand exorbitant sums in costs from my clients with entirely inappropriate menaces.

Yet another example of where our civil justice system is heading - thanks to the idiot with the “Lord Chancellor” badge.

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