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JimLawyer
JimLawyer, Solicitor
Category: Law
Satisfied Customers: 11635
Experience:  Senior Associate Solicitor
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We have a small business, we had a p/o given to carryout

Customer Question

Hi Pearl, we have a small business, we had a p/o given to carryout work (no contract signed). There has been additional work above and beyond the p/o which was agreed but then the company have refused to pay part of the bill. We have sent a message to them advising we will not continue to carryout the rest of the work due to not being paid in full for additional work carried out. They have now come back and advised that we are in contract with them and they are going to get someone else to finish the job and if it costs more that what is left on the p/o they will take us to court over it. We tried to speak to them several times regarding it with no joy to resolve it. They started the job later than schedule, had lots of breaks throughout of work stopping and starting and we just couldn't afford to lose anymore money on it Do they have a case against us
JA: Where are you? It matters because laws vary by location.
Customer: UK
JA: What steps have you taken so far?
Customer: None we have only just received there email, i have printed all our invoices off and have calculated how much money is left on the p/o. We will look at the work left and work out if it covers it. Its almost like they are trying to bully us into carrying the work out when we have verbally told them that if they do not pay the invoices we will not continue to work for them.
JA: Anything else you want the Lawyer to know before I connect you?
Customer: the work above and beyond was agreed verbally with the team on site not myself the director, i was advised that i needed to bill it after the work had been done.
Submitted: 11 days ago.
Category: Law
Expert:  JimLawyer replied 11 days ago.

Hi, this is Jim, thank you for the question - I will resolve this for you.

Sorry to hear of the issue. The absence of a signed contract is not an issue as a contract can be written, verbal, or even implied by conduct. However, a written contract is desirable so the parties know the terms they are working to and it certainly helps the court if and when a dispute arises.
In terms of the non-payment, clearly they are in breach of the agreement by not paying you. You are the aggrieved party here. They are being unreasonable in not paying you and saying that they will now engage someone else to finish the job. It also sounds like they did not really comply with the expectations under the agreement they had with you either - that in itself would be grounds to terminate the agreement and demand your payment from them. I do not see how they have a case against you - it is the other way around from reading your question.

I would recommend that you send them a formal letter before action to demand payment within 30 days and say that if they do not pay you what you are owed, 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. It should say that you claim your money back due to breach of contract on their part.

You will need to register at 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.

Claims between £10,000 and £25,000 are subject to fixed costs only so if you lose then the risk is minimal. Further, the money claim website allows you to sue for an amount up to £100,000.

You would claim the sum for the loss, the court issue fee (details of the money claim fees are listed here at page 5:https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/904862/ex50-eng.pdf) and court interest which is 8% calculated on a daily rate from the date of loss to date of court judgment, plus the Bank of England base rate (under the Late Payment of Commercial Debts (Interest) Act 1998). The site allows you to calculate the interest and add it to the claim. If a hearing is required then there is a fee for this too - see page 7 of the previous link for details. Again, that fee is recoverable if you win.

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 if £750 or more is owed (if suing a limited company), apply to summons them to court for questioning, 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 and answers the question - please feel free to ask me anything else.

Have a good day,
Jim

Customer: replied 11 days ago.
Hi Jim,Thanks so much for you quick response, we are happy to call it quits on the company! they owe us £600 from the invoice its not the amount that has caused this its the way they have done it. Its not acceptable not to pay an invoice when the work has been carried out. The job its self has around £5k left on it to cover the remaining work. this is what was emailed to us this morning. i guess my question is if they employ someone to cover the work and they charge more than we would could they pass the costs onto us?
Customer: replied 11 days ago.
It is now our understanding that you are refusing to return to the Tooting apartments project, contractually you are legally ablidged to finish all works that are on your purchase order. Having tried to contact you several time’s for a date for your return. You texted me to say you had no intention to come back to site. We are now forced to source outside labour to finish your contract works the costs for this will be deducted from money left on your order value, should the costs for finishing the contract amount to more than the amount left on your order we will seek legal advice to recoup any losses accured.
Expert:  JimLawyer replied 11 days ago.

Hi there, they could only try to pass the cost on to you if they though you were in breach of contract. Or if your service was not carried out properly, etc. It sounds like they refused payment so in fact it is they who are in breach. Why do they expect you to complete works without full payment? It's a nonsense.

If they do sue, you will receive court documents (a response pack) which you must complete and return to the court. It is a tick box exercise for the most part and there is a short section to write a defence which is easy enough though please feel free to come back to this site if you need any more help. A claim will also take 6-12 months to be decided at court. If you lost then you would get 14 days to pay the judgment before the claimant can enforce the order, and 30 days to pay in full before it is registered with credit agencies. The claimant cannot recover legal costs if they win, in a claim under £10K (a small claim), all they can claim are the court fees and interest.
I can assist you going forwards if it gets to the point they issue a claim.

Customer: replied 11 days ago.
my husband used to work direct for this guy years ago before he started his own business in the same trade and i feel that its sour grapes in why he is doing this. Thank you so much, i will be in touch if we need further help with this.
Expert:  JimLawyer replied 11 days ago.

Yes, it could well be, anyway glad to have helped - keep me posted.
Have a good day,
Jim