How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • Go back-and-forth until satisfied
    Rate the answer you receive.
Ask F E Smith Your Own Question
F E Smith
F E Smith, Advocate
Category: Law
Satisfied Customers: 13882
Experience:  I have been practising for 30 years.
18203470
Type Your Law Question Here...
F E Smith is online now

We have had a deposit paid into our account of £798.00 which

Customer Question

Hi, we have had a deposit paid into our account of £798.00 which was paid via a cheque made out to someone else. This cheque has since been returned due to the account having been closed. Goods were dispatched following the initial payment . As we were not made aware that the actual cheque was not made out to our firm -, but waaas paid into our account by the receiving branch - who is responsible for our loss
JA: Where are you? It matters because laws vary by location.
Customer: Barwell, Leicestershire
JA: What steps have you taken so far?
Customer: Have been in contact with our local branch but have been told its not their problem basically
JA: Anything else you want the Lawyer to know before I connect you?
Customer: Such as?
Submitted: 12 days ago.
Category: Law
Expert:  F E Smith replied 12 days ago.

Good afternoon. I will assist with your question - be aware this is an email not chat service therefore i maybe delayed in replying.

who's name was on the cheque?

who paid it in the branch?

what is your business?

Customer: replied 12 days ago.
M H Gates Ltd, paid in by Steven Reeves/J Behan, Steel Fabricators
Expert:  F E Smith replied 12 days ago.

Just let me get this right please.

A cheque was made payable to somebody else but was paid into your bank account and that was in payment for goods sent to someone else?

For whatever reason, the cheque has not been honoured.

Is that the situation? Why did you accept the cheque from a 3rd party and why did you paid into your bank and why did the bank allow it to go through?

I need the background detail please as to what led up to this. Thank you

Customer: replied 12 days ago.
We did not accept the cheque, it was paid directly into our account by our customer at his local Bank. We want to know why the bank even accepted it as it wasn't made out to Atlantic Fabrications Ltd. It showed up on our account statement as Deposit point. The payment was for security grilles for 2 doors and 4 windows for which we produced a Pro-forma invoiceon the 1st Oct. The client then paid the cheque into our account the following day 2nd Oct and collected the goods via a courier 2 days later the 4th Oct. We were notified by our bank via a letter (dated 3rd Oct) which was received on the Monday (7th Oct) following the collection of goods on the Friday.
Expert:  F E Smith replied 12 days ago.

So the client confirmed they had paid the money straight into the bank and before the cheque cleared, they have collected the goods.

The cheque subsequently bounced.

I still don’t know on what basis you released the goods before the cheque had cleared.

You obviously have a claim against the customer.

I am not convinced that you have a claim against the bank, because the bank never told you that the cheque was cleared

Customer: replied 12 days ago.
It showed clearly in the account - it did not show as an uncleared cheque - we checked.
Expert:  F E Smith replied 12 days ago.

Some bank statements are sadly lacking because Once upon a time these checks would appear as “unclear effects” and sometimes “pending transactions”.

I have looked recently (within the last 24-hours) at my own bank statement into which a large cheque has just been paid and it is showing as being available to draw upon. I paid the cheque in Friday afternoon and on Monday it is showing as being available when clearly, it is not. I think it’s a quirk of the banking system.

It will help if I explain how claims in negligence arise.

There needs to be

1. a duty of care

2. the duty of care needs to be breached

3. as a result of the breach there needs to be loss or injury

4. the loss or injury must be as a result of the breach

5. the loss or injury resulting from the breach must be reasonably foreseeable.

In order for there to be a claim in negligence, all 5 heads have to be satisfied.

Although a party may be able to opt out of negligence claims in respect of damage to property by having a contract or disclaimer, it is not possible to opt out of personal injury or death as a result of negligence.

The relevant statute is the Unfair Contract Terms Act 1977 (UCTA).

However even a disclaimer in respect of negligence claims with regard to damage to property will only be applicable if it passes the UCTA test of “reasonableness”. You would need to Google the Act to get all the details of that but basically a person can’t exclude liability for claims in negligence in respect of damage to property to basically do what they like, and drive a coach and horses through all their obligations.

You potentially have a claim against the company, as I said earlier. You potentially have a claim against the bank under the Supply of Goods & Services Act (it is the old legislation which applies to business transactions not the later Consumer Rights Act- although the provisions are the same) for failing to carry out the job with reasonable care and skill.

You also potentially have a claim in negligence against the bank.

If you decide to sue the bank in the Small Claims Court for this money then win or lose, you may find they close the account so I advise caution.

You would be at liberty to complain to the Financial Ombudsman but the Ombudsman seems to be selective as to whether they will deal with business issues or not. The stance seems to be that they will deal with small business issues but not large business issues although they tend to seem to be a law unto themselves.

Ultimately, if you feel the bank are responsible for this and they want refund this money, then your only remedy is to take them to court because you cannot beat them with a blunt instrument until they pay up.

Can I clarify anything else for you?

I am happy to answer any specific points arising from this.

Please take a moment to look at the top right-hand corner of the page and rate my service by clicking one of the stars at the top of the screen.

You may need to login again to use the rating service. Although it says "rate to finish" it doesn't close the thread and we can still exchange emails.

It's important that you use the rating service because that gives me credit.

It doesn't just give me a pat on the head! It's what gets me paid!!

There is also an experts incentive scheme whereby the more 5 star ratings I get I do actually get a pat on the head!

All you need to do is press Submit.

Thank you.

If you still need any points clarifying, I will still reply because the thread does not close.

Best wishes.

FES