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JimLawyer
JimLawyer, Solicitor
Category: European Law
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Experience:  Senior Associate Solicitor
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I have recently been served papers against me personally. I

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Hi, I have recently been served papers against me personally. I am based in the UK. The transaction involved the sale of a Franchise between a limited company (which I was a Director of) and the claimant. I resigned from the Limited company in 2017 leaving it with investors without taking a penny for myself. I was not happy with the direction of the business. During my time, the limited company employed the services of a leading Franchise development company to launch and promote the Franchise. I am confident that any claim can easily be fought off. However, seeing the transaction was between the limited company and the claimant, surely the claim should be against the limited company (or its insurers) and not me? So my question is, is there some sort of test the claim has to go through before it can be even considered by the court? For example, the claim is not against me but against the limited company. If so, what should I do when filling in my defence? I am representing myself in this case. Thank you.

Hello, my name is Jim and I am a qualified lawyer happy to help you today.

Unless you signed a personal guarantee as director then the claim cannot be against you - it has to be against the limited company. This is because the contract was between the claimant and the limited company (privity of contract in common law rules means you are not party to the contract). As such your defence needs to state this and that the claimant has pursued the wrong party.

You should give them 7 days to discontinue their claim in a letter or email - if they do not then you should apply to strike out their claim. I have the forms and further details if you need them.

I hope this helps - if you can please accept the answer and give me a 5 star rating (the top right of your screen & then click “submit”), I can answer follow up Q&A's at no extra charge and I will be credited for helping you today.

Many thanks,

Jim

JimLawyer and other European Law Specialists are ready to help you
Customer: replied 12 days ago.
Thank you for this advice Jim. I want to go a little further if I may. The Limited company employed the services of Franchising Direct at a considerable cost (£20k approx.) to build the Franchise model correctly. The Franchise company also handled the promotion and discovery days and signed the contracts with the Franchisees. I wanted this to be done right that’s why I went to the expense of paying for the services of an expert company in this field. I had little involvement in the discovery days. The Franchise model that was built was indeed correct and accurate. The promotional material was also correct. However the claimant is claiming misrepresentation by me in regard to the Franchise model. They state I knew the training was inadequate etc etc. They also claim the promotional material was misleading and inaccurate. These claims are absolutely incorrect and I could prove it if forced to. They are trying to say that I am the mastermind and therefore soley responsible for a purpose misrepresentation of this Franchise. Of course it is untrue, I must stress that. So my question is does your previous answer still apply (namely apply for it to be struck out etc) when taking into account the misrepresentation claim against me personally?
Customer: replied 12 days ago.
PS, I forgot to mention, I did not sign a personal guarantee nor did I even sign the contract with the claimant

Yes, the advice remains the same - there is no way you would be found liable. You were the director but the company is liable (not yourself). It would be different if you signed a personal guarantee.

Customer: replied 12 days ago.
Many thanks Jim, I am happy to pay for a phone call regarding the below questions. I am also interested in having you look over the steps (before I do each one) I need to make in order to get this thrown out. So please let me know how to proceed with a chat or engage further in regard to the below:

Status-
Papers served on me date 5th November 2019
I have 14 days to issue my defence or apply for an extension.
(I have already offered mediation purely because that’s what I read I should do and received advice a long time ago in this regard)

Next Steps
So should my next step be an email to the claimants team asking them to remove the case against me AND at same time file a defence (due to time constraints) or apply for an extension?
If filing a defence should I include defending the actual claim ie the misrepresentation claims OR should I simply state it should be against the Limited company and not me?
When should I use the form for it to be struck out?

Yes, you need to file a defence regardless - if you do not and say your application fails, you would not have filed a defence so the claimant effectively wins.

SO, defence first, then a letter to the claimant to invite them to discontinue their claim in 7 days given they sued the wrong party.

You can either fill in the N9B response pack the court may have sent to you already in order to fill out the defence section, or if not, use the attached template to fill out your defence. It needs to address each part of the claimant's allegations (say whether each allegation is admitted or denied, or you are unable to admit or deny due to no details given by the claimant). If you do not do that then you are taken to admit the allegation in question.

Then sign and post the defence to the court (and copy to the claimant).

If you want to post a new question about the application to strike out - there is a lot of detail and a few forms so if you can post a new question to the Just Answer site, mark it "FAO:JIM" and I will pick up at some point today.

Many thanks