Hello, my name is Jim and I am a qualified lawyer happy to help you today.
Yes, that is a red flag because they have been sued by three previous claimants for one reason or another and the company has failed to pay the CCJ. As such you should demand your money back given this development.
I would recommend that you send the builder a formal letter before action to demand payment within 14 days and say that if they do not pay you, you will issue county court proceedings against them. See attached template as an example of what to say. Please let me know if you cannot see the letter which I have uploaded. You will need to tailor this letter to your situation.
You may also want to threaten a report to Trading Standards on 03454 040506 - you should also say in your letter that the builder is operating their company whilst likely insolvent.
You will need to register at http://www.moneyclaim.gov.uk so that you are ready to issue the claim in the event they dispute the claim and do not pay you. The website is very user-friendly and you would not need a lawyer to use the money claim site. Claims with a value of under £10,000 are classed as a "small claim", so legal costs are not recoverable and the matter may be dealt with on paper by a Judge, not at a hearing. A hearing may be necessary if the court thinks that oral evidence is required to dispose of the case.
You would claim the sum for the loss, the court issue fee of £185 (based on a claim for £4000) and court interest which is 8% calculated on a daily rate from the date of loss to date of court judgment. The site allows you to calculate the interest and add it to the claim.
If you win then once you have the CCJ from the court the defendant has 14 days to pay in full. If they do not then it gets registered with the credit agencies after 30 days. You can also enforce the CCJ with the county court bailiffs or transfer the debt to the High Court for a small additional fee assuming the total amount owed is at least £600 and you can use the high court enforcement officers who have greater powers than county court bailiffs. The transfer fee is added on to the debt and payable by the defendant.
There are other enforcement methods which I can help with, including bank account freeze, charging order on their property (and then apply to force a sale), application to wind up the company, apply to summons them to court for questioning, attachment of earnings order against his employer - all of which can ensure you are actually repaid the money.
You may find they just pay you after receiving the letter before action – hopefully they will want to avoid litigation.
I hope this helps - if you can please accept the answer and give me a 5 star rating (there should be a button at the top of your screen to do this), I can answer follow up Q&A's at no extra charge and Just Answer will credit me for helping you today.