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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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A large business is coming down heavy on me. They contacted

Customer Question

Hi
A large business is coming down heavy on me. They contacted me and accused me of using their customer data following the termination of my franchise. I did for a short period but they applied for an injunction to further enforce the post-termination agreement. I agreed to the injunction and I stopped trading. It made a couple of grand before I closed down. We had a closed meeting where I presented evidence that there was lies in their witness statements that supported the injunction. They requested a drop hands and no costs were paid by either of us. I started up in a competing business after the injunction (1 year). They threatened to take me to court again suggesting I still had their customer's details. I don't. I have recently signed an affidavit to that effect. They're clearly not happy that I have a competing business. I was in the industry prior to being invited to take one of their franchises so I am not using their "trade secrets".
If I admit it to them now that I did actually trade for that short period, I can't offer them anything. I have no mortgage, no expensive luxury assets. I live in a rented flat. No savings. Leased car. I assume if it goes to court and I attempt to fight it and lose, I will be forced to pay damages. But, if I have no money, what happens? Do I have to declare bankruptcy? Will they still want money after the bankruptcy? Also, my business (which does compete with theirs) has only made about £5k profit from a £100k turnover last year, and there's another partner in the business. We clearly don't make much money.
Their claim is for £300k! and they want their costs.
Is there anything else they can do? Can they take money from my income? Can I be forced to stop trading?
Would there be a certain settlement process I should use i.e. Part 36?
Many thanks
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Alex Watts : Hello my name is ***** ***** I will help you with this.
Alex Watts : Did they seek for you to account to profit in the original claim please?
Customer :

Hi Alex. I think so, yes

Alex Watts :

So they would seek to re-litigate on a matter which they had previously brought a claim?

Customer :

I'm not sure what you mean. Their first claim against me was because of the initial use of the data, prior to the injunction. They are now saying I have kept the data and therefore in breach of that injunction. They offered a drop hands to their first claim.

Alex Watts : I am saying they are threatening to issue proceedings on the same grounds, is that rights.
Customer :

Yes, that is correct. It was them who requested a drop hands. Does this mean the proceedings were "closed"?

Alex Watts :

Yes.

Alex Watts :

They can not relitigate on decided matters.

Alex Watts :

Therefore should they issue a claim you can defend it on the basis you had a previous claim arising out of the same facts and that this was dropped hands.

Alex Watts :

Therefore as such issuing this new claim is an abuse of process

Alex Watts :

Their claim should fail because there was a previous claim

Alex Watts :

Can I clarify anything for you about this today please?

Customer :

Ok, I will need to look a little bit further in to their full claim. Their claim is for damages arising out of the fact that they assume I have held on to the data file.

Alex Watts :

Sure.

Customer :

With regards ***** ***** may happen if they win and they want their legal costs; If I am unable to afford to pay their legal costs which at the moment are around £50k, what happens? I am a director of a limited company. There are two other directors. If I am forced to declare personal bankruptcy, will I need to resign from my position? I have looked in to it and have found out that directros become disqualified. They must also not have anything to do with the management and marketing of a limited company. This is my only source of income. If I lose it, I'm done for. Because I am an ex-franchisee, I think they are racking up their legal costs with the hope of me losing and having to pay for them. Then, as I wont be able to afford them, they can make me bankrupt and force me out of the industry. Am I just over-thinking things, or is this possible?

Alex Watts :

If their claim is for £10,000 or less its a small claim.

Alex Watts :

Above this if you lost you would be liable.

Alex Watts :

If you lose then you may be bankrupt and you would have to resign as a Director, but you could still be an employee

Alex Watts :

Does that clarify?

Alex Watts :

If this answers your question could I invite you rate my answer before you leave today.


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