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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 71051
Experience:  Over 5 years in practice
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I own a small business and we have withheld £520 payment

Customer Question

I own a small business and we have withheld £520 payment from the bookkeeping company we use for services we have been charged for which we believe are due to them correcting mistakes arising from their processes and instructions to us regarding how to undertake bookkeeping processes.
They have threatened to take us to small claims court. I have been advised that instead we should take them to small claims court instead as we are not happy with the service they have provided. To this end, I have filed a MCOL claim against them for the £520 which they should receive in the next day or two.
If we are withholding payments, is it possible to use Money Claim Online to claim money against the outstanding invoice or do we need to pay the invoice and then claim against them for the same amount? If this is the case, can I make the payment now and continue with the existing MCOL process?
Thank you,
Laurence Mattingly
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you with this.
You can use the defence of set off. This means you can say you are defending the claim and set off sums owing because of their mistakes.
However I would advise in not making payment and then defending it on the basis you don't owe it. In making the claim as you have done you need to show you owed the payment of £520.
So I don't think you need to make a claim, they need to claim against you.
Can I clarify anything for you about this today please?
Customer: replied 2 years ago.

Thank you. I understand the defence of set-off.

As I said, I have already made the claim under advice of a Magistrate that it would be better to be the Claimant rather than the Defendant. Is this a reasonable process and would it be accepted by the courts?

Could you please expand on your stetement "In making the claim as you have done you need to show you owed the payment of £520.".

Kind regards, Laurence

Expert:  Ash replied 2 years ago.
You can but I don't think your claim will succeed. You have not made the payment of £520 so you are not owed it. If you pay the £520 then you can claim it back.
But in effect you have not paid £520 and requiring a further payment of £520
Customer: replied 2 years ago.

Why do you not think the claim will succeed?

I am claiming for compensation for faulty goods or services provided which is a valid claim. I am seeking the level of compensation equivalent to the sum I have withheld. I just need the law to recognize that this is a fair and reasonable claim. If I win, the money will be owed by the defendant to myself which will be paid by means of a credit note against the outstanding invoice.

Surely I have the right to claim for the faulty services provided and not have to wait for them to claim against me for the money.

Expert:  Ash replied 2 years ago.
Exactly. So you have withheld. In effect you are claiming £520 for the claim then an additional £520 for the sum withheld so £1040 in total.
That is why I don't think you should have brought a claim.
Customer: replied 2 years ago.

I'm sorry but I am not happy with your consideration of this case.

Customer: replied 2 years ago.
Relist: Answer quality.
Customer: replied 2 years ago.
Relist: Answer quality.
Expert:  Jo C. replied 2 years ago.
Thank you for your question. My name is ***** ***** I will try to help with this.
I can confirm that the answer above is correct.
Never take advice from Magistrates. They have absolutely no legal training at all upon civil law and most of them know very little about criminal law. Whatever you have been told Magistrates are not legally qualified and should not be giving advice on the basis that they are. It is almost better to take advice from police officers and that is like getting the Inland Revenue to fill out your tax return for you.
Take advice from proper lawyers.
Customer: replied 2 years ago.

Thanks Jo. How do you think I should proceed in order to progress this? Would it be best to make payment with a note that it is not an admittance that the money is due and that it will be contested? Will this enable me to proceed with the claim?

Expert:  Jo C. replied 2 years ago.
The first step is to complain about the Magistrates if they have been giving you advice on the basis that they are qualified to do so.
Being a Magistrates is nothing special whatever you have been encouraged to believe. Do not fall into the trap of thinking that it is prestigious. They do not have a good reputation.
I'm not sure you really need to do anything though. You are withholding the payment that you say you are due. If they disagree then they can sue. You haven't issued so there is no need to withdraw.
I'm really sorry but I am at a loss to see why you want to bring a claim? You say you are due X sum. You are withholding that sum. What is the point of doing anything?
Customer: replied 2 years ago.

I did say above that I have already made the claim under advice. I have no doubt.that the other party will sue. Is it not a better position as a claimant rather than as a defendent? if I was to pay the amount invoiced, could my claim proceed? Thank you.

Expert:  Jo C. replied 2 years ago.
Not really. In fact, actually it is better to be a defendant because they the other side have the burden of proof. If that is what this person encouraged you to believe then you should be complaining about negligence. All that has done, on these facts, is render you liable to costs.
You can withdraw the claim. It could be struck out on summary judgment. It depends whether the other side apply. It really should be as it just plain has no basis at all.
I'm not sure what paying achieves? I suppose you could pay and then reclaim but that appears completely pointless. Also, you would need to vary the claim you have made to reflect that.
Customer: replied 2 years ago.

could you please explain why it has rendered me liable to costs? I thought I would be liable to pays the other party''s costs if I lost and not if I won, whether I am claimant or defendent

Expert:  Jo C. replied 2 years ago.
Yes, but you will lose because there is no claim for the reasons explained.
The risk here is that a Judge could well say that this is a vexatious claim and award actual costs although actually unless the claimant has incurred any legal fees that would not be substantial.
Customer: replied 2 years ago.

Thanks Jo. As my claim is for £520+£60 court fees, and this exceeds the amount I have withheld, does this not put me in the net position of claimant as I claim they owe me more than I owe them? if I win, they would be ordered to pay me £60.

Expert:  Jo C. replied 2 years ago.
If you have issued then you are the claimant.
But you will lose for the reasons above.